Report: Consumer Financial Protection Bureau may become bitcoin watchdog

In May, the Government Accountability Office (GAO) drafted a confidential report about the increasing need for meaningful digital currency policies. The GAO report suggested that the Consumer Financial Protection Bureau (CFPB) be tasked with the job. The agency was created in the wake of the 2007 financial crisis, and is already tasked with handling thorny finance-related industries such as payday lenders and debt collectors in addition to traditional organizations like banks and credit unions.

The GAO said that the CFPB was uniquely suited for the task of “providing consumers with information to make responsible decisions about financial transactions,” and should “take steps to identify and participate in pertinent interagency working groups addressing virtual currencies.” The GAO report didn’t cite any specific issues for the CFPB to tackle, although fraud and predatory activities are clearly a concern for the agency.

CFPB acting assistant director for card and payment markets responded to the GAO request shortly after the release of the report, saying: “We’re looking forward to increasing our involvement in formal working groups as they engage on specific issues relating to consumer protection.”

The GAO appears to represent a shift in attitude from Washington, admitting that previous efforts by government agencies were “primarily concerned with money laundering and other law enforcement matters” of bitcoin and other digital money, rather than consumer protection. With bitcoin generating plenty of mass media attention thanks to Silicon Valley investment and rumblings from Wall Street, the decision to bring in the CFPB indicates that regulators expect bitcoin to stick around for at least the near future.