I’ve written several articles on the punitive Credit Card Competition Act and why its policies are misguided. It’s based on a myth that the “big credit card companies” have some kind of monopoly, duopoly, or anticompetitive power.
But it is a myth, and implementing routing requirements or price controls (indirectly or directly) will not promote competition. It will harm competition. Those policies will not promote innovation or expand consumer choice. They will hinder innovation and shrink consumer choice.
Now, in a story that is typical of how Washington works, two special interest groups have joined forces to support the punitive Credit Card Competition Act.
The two groups, the Merchants Payments Coalition (MPC) and the Payment Choice Coalition (PCC) have just announced that they are “each joining the other’s group to promote their shared goals of enhancing innovation, competition, and choice in U.S. payments.”
The pitch sounds lovely, but there’s a special interest twist. Members of the PCC include Coinbase, Circle, and the Blockchain Association.
So, that’s how far the crypto industry has come. They started out just pushing for a new regulatory framework, so that crypto and stablecoins could compete with other payments technologies. And now they’re actively pushing for the Credit Card Competition Act, legislation that would unambiguously harm credit card companies and other payments firms.
Actively seeking rules and regulations that would harm your competition has practically become a rite of passage in Washington, so it’s unsurprising to see crypto firms supporting these policies. But it’s still incredibly disappointing.
It’s also incredibly shortsighted. Giving more power to regulators to dictate terms in the payments sector will not end well for crypto firms. Eventually, regulators will restrict them at the expense of other groups.