A drafted bill circulating US Congress wants to keep “big tech” out of finance, in response to Facebook’s development of the digital currency libra.
Bill to Halt Digital Currencies
On July 12, copies of a bill reportedly drafted by members of the US House of Representatives Financial Services Committee emerged online, under the title “Keep Big Tech Out of Finance.” The bill is seen as retaliation for the most recent Congressional hearing over Facebook’s digital currency, which Federal Reserve Chairman Jerome Powell said raised “many serious concerns.”
While the bill has yet to be confirmed by government officials, an inside source told The Block that it was legitimate and originated from within the Financial Services Committee.
The bill begins with the treatise of blocking platforms, like Facebook, from entering the realm of financial services.
“To prohibit large platform utilities from being a financial institution or being affiliated with a person that is a financial institution, and for other purposes.”
According to the bill, large platforms are defined as entities with annual global revenues in excess of $25 billion. The bill specifically seeks to prohibit these platforms from the ability to “establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value or any other similar function.”
Violators of the proposed legislation face a fine that could extend to $1 million per day.
Going After Facebook’s Libra
In a nutshell, the drafters of the legislation seek to prevent Facebook and other established companies from issuing their own digital currencies.
Since being officially announced in June, libra has caused a stir with regulators around the globe. Members from Facebook’s digital currency team are set for a pair of hearings this week with the Senate Banking Committee and the House Financial Services Committee.
While no official legislation has been levied against digital currencies, libra appears to be walking into a hostile environment that is bent on imposing some stricter form of regulation.
On July 11, US President Donald Trump stoked the fire ahead of the hearing, in a series of tweets attacking bitcoin and libra.