Written by Eamonn K. MoranPress reports indicate that the Consumer Financial Protection Bureau (CFPB) has announced that it is working with the Commodity Futures Trading Commission (CFTC) to develop a regulatory sandbox for fintech companies. During a speech before the Women in Housing and Finance organization, CFPB Acting Director Mick Mulvaney reportedly stated that “[w]e are … in the process of putting together, for lack of a better word … a fintech sandbox.” “We recognize that so often the case is with new technology, there is a needle you have to thread,” Mulvaney reportedly added. “If you don’t give any regulation at all, it has the chance to go off the rails and completely burn itself out, which is where I was fearing bitcoin was going to a couple months ago if they haven’t already. And at the same time, if you over-regulate, you sort of tamp down that creativity and you discourage the innovation.” As we reported previously, Arizona became the first state to adopt a regulatory sandbox in March, while more states could soon adopt a similar approach, as similar legislation has already been introduced in Illinois and is being considered in other states. The state banking regulators across the six New England states also have been exploring the creation of a regional compact (New England Regulatory FinTech Sandbox) that would allow fintech companies to experiment with new and expanded products in “a safe, collaborative environment.”
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