This week, Big Tech firms were in the spotlight again — and not only because it is earnings season, but also because Twitter accepted Elon Musk’s $44 billion offer. Regulators quickly reminded him that Twitter will have to respect new EU content moderation rules. Crypto still divides regulators: some of them still compare it with the “wild west” while others embrace it. In the U.S., the Director of the Consumer Financial Protection Bureau (CFPB) told lawmakers that he is planning to do more on open banking, may change credit card rules and will look closely at how tech giants operate in finance.
Crypto Divides Regulators
On Tuesday, April 26, Nikhil Rathi, the Chief Executive of the U.K. Financial Conduct Authority (FCA), gave a speech in which he stressed the importance of supporting innovation. After a few months during which crypto firms have showed discontent with the regulator, Rathi sent a message to the crypto community stressing that the U.K. should be a leader in crypto legislation in order to attract the majority of FinTech investments.
On the other hand, Fabio Panetta, a member of the European Central Bank’s executive board, warned Monday (April 25) that mayhem has converted the promised land into the Wild West, where the few abuse the dreams of the many. He claims that today’s cryptocurrency aficionados are awestruck by the market’s growth, with many believing they should take a chance on the crypto gamble.
African countries are embracing crypto. Finance Minister Herve Ndoba said the legislation will encourage the use of cryptocurrencies in the Central African Republic’s economy, only days after a proposal to legitimize the decentralized digital currency was introduced. According to Ndoba, the proposed legislation will bring cryptocurrency into all areas of the economy. Despite having gold and diamond reserves, the Central African Republic is one of the world’s poorest countries.
Big Tech Has a new name: Elon Musk
Elon Musk’s offer to purchase control of Twitter has been approved, valuing the firm at $44 billion. The purchase represents a dramatic shift of sentiment for Twitter, which had previously resisted Musk’s initial bid and used a “poison pill” strategy to keep him at bay. According to PYMNTS, Musk joins a long line of billionaires who have bought their way into media moguldom, from Rupert Murdoch’s purchase of The Wall Street Journal in 2007 to Red Sox owner John Henry’s $70 million purchase of the Boston Globe in 2013.
Read more: Twitter Approves Elon Musk’s $44B Bid
Twitter’s acquisition by the self-described “free speech absolutist” quickly brought the attention of EU regulators who recently passed new rules for content moderation in online platforms. Elon Musk’s plans for Twitter may include changes in content moderation policies that may not necessarily clash with the goals of the EU regulation.
Google and Meta have both committed to allowing only licensed financial institutions to advertise promotions on their sites. Under Rathi’s leadership, the FCA wants to be more assertive, even where it doesn’t have the jurisdiction to make changes. As customers increasingly become victims of fraud linked to internet ads, this entails putting pressure on some of the world’s top corporations and providing a lot of caution about online scams.
CFPB’s Chopra Wants to do more
Rohit Chopra, director of the CFPB, had a busy week with announcements and congressional testimonies. On Monday, the bureau announced that it will start using a largely unused legal provision to examine nonbank financial companies, FinTechs, that pose risks to consumers. This supervisory authority allows the CFPB to investigate a company, and it provides the bureau with a wide range of options once the supervision is concluded. The CFPB can issue recommendations, the director of the bureau can also make determinations and relief is also available in a civil action or administrative adjudication.
On Tuesday, Chopra gave testimony before the Senate Banking Committee where he told lawmakers that the agency is planning to promote open banking and it will go after repeated offenders, in particular large companies — and he also sent a message that Big Tech firms could soon dominate some parts of the financial technology ecosystem.
On Wednesday, Chopra gave testimony before the House Committee on Financial Services, and the conversation with lawmakers focused on the “junk fee” investigation and credit card late fees. Chopra suggested that the agency is looking at different ways to reopen the CARD Act rules to see if any change is needed.