In a legislative draft titled “Keep Big Tech Out Of Finance Act,” members of the US Democratic Party are working towards passing stringent rules to discourage big tech firms eyeing the financial market.
This legislation is especially targeted at big firms such as Facebook who wants to function as a financial institution or issue virtual currencies. According to the draft, a large tech firm is one which majorly offers an online platform service and has accrued at least $25 billion in annual revenue.
The draft states:
“A large platform utility may not 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, as defined by the Board of Governors of the Federal Reserve System.”
The cryptocurrency news came in just after the President Donald Trump rained fire and brimstone on Facebook’s Libra, Bitcoin, and other crypto coins. The decision, which was led by the Democratic majority in the House Financial Services Committee, is bound to meet an opposing force – the Republican members who are supposedly keen on innovation.
The Democratic fraction is undeterred though. To show the gravity of the issue, the proposed bill suggests companies that fall short of the rule should pay $1 million penalty per day for the violation.
That such a scary figure and I guess that is exactly what they wanted – to scare the companies away. Although some people are of the hope that the Republican members would fight the decision, it is essential to note that this fight wouldn’t be an easy one. The bill supporters need to overcome major hurdles to gather enough votes to pull through at the lower chamber as it will meet a lot of difficulties; and even if it manages to pass the full house, it will definitely meet some troubles at the Senate.
Anti-Crypto Bill Targeted at Facebook and Other Big Tech Companies
From the draft’s definition of a large company, it is safe to say that this rule is specifically targeted at Facebook and other large tech firms that are planning to “become a bank” as the President said in his tweets.
You will recall that Facebook’s journey in the crypto world hasn’t been such a pleasurable one. First was its failed attempt in the early crypto days and its ‘second entry’ doesn’t sit well with top financial regulators and the governments.
In fact, the EU already set up a special task force to look into the Libra cryptocurrency to ensure it meets every rule in the books. Also, the Chairman of the Fed Reserve, Jerome Powell, stated categorically that Facebook’s Libra will not see the light of the day until it would address concerns over consumer protection, privacy, volatility, and money laundering.
What do you say about the proposed bill? Nah or Yay?
