- Heading into 2022, Electronic Transactions Association (ETA) members are concerned about the future of cryptocurrencies, so the trade group said paying close attention to legislation on that front will be one of its top legislative priorities. The association, which includes big tech company members with interests in the payments sector, said in a press release Friday that it supports development of "an appropriate regulatory framework" for cryptoassets that "protects consumers and fosters continuous innovation."
- The trade group is also calling for the federal government to take a cautious approach to the development of a central bank digital currency (CBDC), an idea being studied by the Federal Reserve and other policymakers. "Given that the existing payments system in the U.S. is safe, effective, dynamic, and efficient, ETA urges policymakers to move thoughtfully and deliberately in order to ensure there are no unintended consequences and that any CBDC would add value to the ecosystem," the ETA said.
- On privacy, another issue the ETA underscored as important to its agenda this year, the group supports a "strong privacy standard that is principles-based to ensure predictability and consistency for consumers." Some policymakers, including Consumer Financial Protection Bureau head Rohit Chopra, have alleged the industry is not doing enough to safeguard consumer data.
Pinpointing the 2022 priorities is a way for the trade group to signal to congressional members and the Biden administration which legislative proposals and executive actions it will pay special attention to this year. With respect to the crypto and privacy issues, the ETA has a similar focus at the state level. The association didn't specify any particular pieces of legislation that it plans to support or torpedo.
Last year, the group said it was focused on assisting the Biden administration in providing stimulus program payments to shore up the economy and employment in the wake of the COVID-19 pandemic. The ETA didn't have anything to say this year about the president, whose recent $2 trillion economic package failed to get lift-off in Congress.
While the ETA has a longer list of issues on its federal and state legislative platform outlines, it was the cryptoasset, privacy and CBDC issues it chose to highlight in the release Friday. "I think those are incredibly high priority topics," ETA Chief Executive Jodie Kelley said in an interview. "They're also incredibly active right now."
With respect to crypto, the release said it was an area of importance to ETA because those new currencies "have the potential to change how commerce happens." Of course, figuring out the right approach to regulate cryptocurrencies is easier said than done, and the ETA didn't have a prescription.
Kelley explained that the government needs to understand how cryptocurrencies are being used before developing an "appropriate framework" to regulate the fast-growing and unpredictable market that could accommodate people who invest in digital currency and those who use it for payments.
Cryptoassets are still new and require a flexible regulatory framework, Kelley said. "All of that is still being figured out and it's going to change over time," she said, so having a "flexible framework" that takes into account the evolving use of crypto and tailors regulations to that is critical.
Other legislative proposals and ideas being monitored by the ETA include privacy. Critics of tech companies entering the banking arena have claimed that the new entrants aren’t required to adhere to regulations for safeguarding confidential consumer information that apply to incumbents.
The CFPB has ordered tech giants Google, Apple, Facebook, Amazon, Square and PayPal to provide detailed information about their "products, plans, and practices." All but Facebook are ETA members. The ETA has raised concerns about the scope of the CFPB investigation.
"The payments industry has long been committed to protecting the privacy of consumers’ data," ETA said in the release. "ETA supports a strong federal privacy standard that is principles-based to ensure predictability and consistency for consumers."
On CBDCs, the trade group essentially reiterated a position that it outlined last year. The Fed was expected to release a discussion paper about CBDCs last summer. It is unclear when it will be published.
On the broader lists of state and federal issues the ETA said it would be keeping a close eye on any legislative developments with respect to buy now-pay later, artificial intelligence/machine learning and smart security to combat fraud, among others.
When it comes to BNPL, the ETA release noted that the new service can expand consumers' payment choices when it's "adopted carefully and thoughtfully." The trade group backs regulation that "fosters innovations and encourages the development and deployment of new products and services that benefit consumers."
Among other items, open banking and the supply of computer chips were also topics on ETA's federal list of legislative priorities. Gift card and money transmission concerns also showed up on its state list.