The Securities and Exchange Commission (SEC) has launched a crypto task force focused on developing a “comprehensive and clear” regulatory framework for crypto assets.
The crypto task force will collaborate with SEC staff and the public to help the commission “draw clear regulatory lines, provide realistic paths to regulation, craft sensible disclosure frameworks and deploy enforcement resources judiciously,” the SEC said in a Tuesday (Jan. 21) press release.
The task force will be led by Commissioner Hester Peirce, with Senior Advisor to the Acting Chairman Richard Gabbert serving as the task force’s chief of staff and Senior Policy Advisor to the Acting Chairman Taylor Asher serving as its chief policy advisor, according to the release.
“I look forward to the efforts of Commissioner Peirce to lead regulatory policy on crypto, which involves multiple SEC divisions and offices,” SEC Acting Chairman Mark T. Uyeda said in the release.
Peirce said in the release that the crypto task force will seek input from investors, industry participants, academics and other interested parties.
The task force invites public comment via email at crypto@sec.gov and plans to hold roundtables in the future, according to the release.
“We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity and supports innovation,” Peirce said in the release.
Peirce told PYMNTS CEO Karen Webster in March 2022 that crypto companies have been arguing for years that they need more guidance from the SEC to understand whether their products are securities and need to be regulated as such.
At the time, the conversation had not been very productive on either side, because companies had been reluctant to accept an open invitation to work out a solution that balances innovation while protecting the markets, Peirce added.
“We have the authority to provide that kind of relief, but we just haven’t shown that we’re willing to be creative in tailoring that relief in a way that makes sense,” Peirce said in the March 2022 interview. “So that would be the most, I think, productive thing that we could do. And if we did that, I think we’d see lots of people willing to come in and work with us.”
Block’s Cash App is reportedly making progress in its efforts to offer banking services to customers who mostly use the app to make payments.
The number of the app’s users who have their paychecks directly deposited into their Cash App account rose by 25% year over year to reach 2.5 million in December, Bloomberg reported Thursday (April 3).
This is a key metric because those who have set up direct deposit are most likely to use the company’s other banking services, according to the report.
Cash App’s efforts are meant to expand its customer base from the underbanked people it has traditionally served to anyone earning up to $150,000 a year, the report said. It has 57 million active users.
“Our long-term goal is to be the primary provider of banking services to the vast majority of Americans,” Block Executive Officer and Business Lead Owen Jennings said, per the report. “In order to do that, you need to cross the chasm in terms of reputation and brand recognition from a simple peer-to-peer app to a full-fledged suite of banking services.”
The company’s most recent efforts to promote its banking services include a marketing campaign in 15 cities in January and approval from the Federal Deposit Insurance Corp. to issue short-term consumer loans through Block’s Square Financial Services, the report said.
At the same time, Cash App faces challenges in drawing customers to its banking services. These include customers’ uncertainty about using the app for all their everyday banking; competition from FinTech rivals like Chime Financial, Robinhood Markets and PayPal Holdings’ Venmo; and a settlement with the Consumer Financial Protection Bureau in which the regulator found that Block’s investigations into unauthorized transactions on Cash App were “woefully incomplete,” according to the report.
Square Financial Services’ receipt of approval from the FDIC to make consumer loans directly to borrowers, using Cash App Borrow, represented a shift, PYMNTS reported last month. Before making the move, Square Financial Services focused on offering Square sellers business loans and savings accounts, and Block made the consumer loans through its external banking partner.
