Federal Reserve Clarifies Guidance on Unhosted Wallets Amid Industry Concerns

Consensys Challenges CFPB's Rule on Regulating Unhosted Wallets

In a letter sent to the Consumer Financial Protection Bureau (CFPB), Consensys, a leading blockchain technology company, has challenged the agency's proposed rule on regulating unhosted wallets. The proposed rule aims to provide greater protections for consumers who use unhosted wallets, which are digital wallets that are not tied to a specific financial institution or exchange.

According to Consensys, the proposed rule is overly broad and could have unintended consequences for the development and use of blockchain technology. The company argues that the rule could stifle innovation and limit the ability of consumers to use unhosted wallets to make transactions.

"We believe that the proposed rule is too vague and could be interpreted in a way that is inconsistent with the intent of the law," said Consensys CEO, Andrew Keys. "We are concerned that the rule could have a chilling effect on the development of blockchain technology and limit the ability of consumers to use unhosted wallets to make transactions."

Consensys is urging the CFPB to revise the proposed rule to better reflect the intent of the law and to provide greater clarity on how consumers can use unhosted wallets to make transactions. The company is also calling for the CFPB to provide greater guidance on how financial institutions can work with unhosted wallets to provide greater protections for consumers.

The proposed rule is part of a broader effort by the CFPB to regulate the use of unhosted wallets and to provide greater protections for consumers who use these types of wallets. The agency is seeking public comment on the proposed rule and is expected to finalize the rule in the coming months.

Consensys is a leading blockchain technology company that provides a range of services, including the development of blockchain-based software and the provision of blockchain-based financial services. The company is headquartered in New York City and has offices in several other locations around the world.