Fintechs Praise Treasury Digital Payments Idea Opposed by States

A top Treasury official’s call for federal regulation of digital payment companies drew cheers from fintechs but condemnation from state bank regulators.

Treasury Undersecretary for Domestic Finance Nellie Liang said the current state-based money transmitter regulatory system wasn’t appropriate for digital payment tools such as PayPal Holdings Inc.'s Venmo and Block Inc.’s Cash App.

“The existing regulatory patchwork is burdensome and inefficient, and at the same time does not adequately address risks to consumers and the financial system or promote competition and innovation by facilitating access to real-time payment systems,” Liang said, according to prepared remarks for an Oct. 9 ...