Fearing the potential impact a popular privately-issued cryptocurrency might have on both American and dollar-dominant global economy, the US lawmakers are drafting a bill to prevent tech giants from taking over financial sector.
The bill titled, ‘Keep Big Tech Out of Finance Act,’ seeks to prohibit any technology company with annual global revenue of more than $25 billion from issuing their own cryptocurrency. The draft explicitly bans “large platform utilities from being a financial institution or being affiliated with a person that is a financial institution.” Any entity that violates the provisions of the bill could be subject to a daily fine of up to a million US dollars.
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.
While the draft legislation does not name any particular companies or digital currencies, President Donald Trump had previously singled out bitcoin and yet-to-be launched Facebook’s Libra in his attack against alternative payment systems last week. Stressing that both Americans and the international community people must put their faith in ‘reliable’ US dollar, the US president has demanded harsher federal regulations of peer-to-peer financial transactions.
Facebook which hopes to take advantage of its massive platform to launch the Libra sometime next year, is facing an uphill battle with US lawmakers and the Federal Reserve, who seem set to prevent the Menlo Park firm from becoming a dominant financial player. This week, the social network giant will face a grilling from the Senate Banking and the House Financial Services Committees about the consequences of the Libra launch, including privacy, money laundering and consumer protection issues.
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