UPDATE (27th June 19:25 BST): The full GAO report is now available and can be found here.

The US Consumer Financial Protection Bureau (CFPB), an independent federal agency tasked with policing financial products, is preparing to take its first steps toward increasing oversight of bitcoin following a request from a separate government agency.

Bloomberg reports that the Government Accountability Office (GAO), which oversees Congressional spending and policies, formally asked the CFPB to look into digital currencies earlier this year.

In a letter obtained by Bloomberg, the GAO said that it wants US consumer finance regulators be more involved in regulating digital currencies.

The CFPB later reportedly told the GAO that it would look into digital currencies in a letter dated 6th May, saying:

It’s not clear how the CFPB would be tasked with creating new rules for bitcoin and other digital currencies, as the GAO letter did not outline recommendations for investigation. However, the CFPB's primary role in other matters is to provide educational materials and hear customer complaints.

Given this mandate, it’s likely that the agency will seek to take protective measures to reduce the risk of financial fraud and abuse in the ecosystem.

Notably, former CFPB Deputy Director Raj Date has been a vocal proponent of digital currencies, lauding the industry for its new and innovative approach to finance in April comments.

Image via CFPB