Facebook’s digital currency plans have caused concern among bureaucrats worldwide and members of the U.S. government seem fearful of a giant tech establishing itself as a financial institution. Prior to the U.S. congressional hearings and the upcoming G7 finance meeting, a U.S. discussion draft bill, the Keep Big Tech Out of Finance Act, hopes to stop large tech corporations from “maintaining, or operating a digital asset.
If Facebook and other companies want to become a bank, they must seek a new banking charter and become subject to all banking regulations, just like other banks, both national and international.
Any large platform utility or financial institution that violates subsection (a) or (b) shall be subject to a fine of not more than $1,000,000 per each day of such violation, in an action brought by the appropriate Federal financial regulator. 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. [It would be a] delicious irony if Facebook’s Libra proposal stimulates the United States government to develop functionality that operates like Libra, backed by U.S. dollar deposits, but operated by the U.S. government.
The drafted discussion bill involving the House Financial Services Committee indicates that certain bureaucrats are determined to stop big tech companies before they even start a crypto project. If the act were to become law, a fine of $1 million per day for starting a digital currency project would make any corporation think twice.
What do you think about the discussion draft bill floating around the House Financial Services Committee? Why do you think the U.S. government wants to keep big tech out of finance? Let us know what you think about this subject in the comments section below.
Bad News for Libra, Good News for Bitcoin
The specter of regulation looms over corporate cryptos. Even if the Keep Big Tech Out of Finance Act never makes it to Trump’s desk. Legislation and regulation will undoubtedly round off the edges of any corporate crypto by the time it sees the light of day. As events in this new industry play out, they continue to validate the macro-thesis underlying bitcoin and its most vociferous supporters.