Congress members draft a bill called ‘Keep Big Tech Out of Finance Act’ in order to bar Facebook and other big tech companies from entering the financial service and cryptocurrency market.
Over the weekend, a copy of the proposed legislation drafted for discussion by the Democratic majority heading the House Financial Services Committee began circulating the web.
The purpose of ‘Keep Big Tech Out of Finance Act’ is to prohibit ‘large platform utilities’ from acting as financial institutions.
According to the draft bill, a large platform utility is a company that mainly offers an online platform service and has a minimum of $25 billion of annual global revenue. Facebook is an entity that fits the definition.
“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 document details.
The bill proposes sanctioning the violation of said rules with a $1 million fine per day.
Ever since Facebook announced plans to launch its cryptocurrency Libra in 2020, both American and European politicians have been voicing their concerns about the violations of privacy that might arise from such an enterprise.
As Bitcoin.com reported at the time, Democratic Congresswoman Maxine Waters said “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight.”
President Trump also expressed his negative opinion on cryptocurrencies in a tweet last week, questioning their lawfulness and stability and emphasizing that the only currency he supports is the US dollar.
Facebook’s efforts on the development of Libra were halted in late June by Waters’ request to hold off further work until Congress has had a chance to assess Libra’s features, business plan, and potential risks.
The ‘Keep Big Tech Out of Finance Act’, which appeared right before the Libra hearings with the Senate Banking Committee on July 16 and the House Financial Services Committee on July 17, seems like an attempt by the congressional authority to forestall taking definitive action on the matter.
Reuters predicts pro-innovation Republican members of the House opposing the proposed legislation. Even if the bill is passed in the House of Representatives, getting the Senate to vote for it would still be a challenge, the international news organization reported.