U.S. government is proposing to ban large technology companies such as Facebook, who are acting as financial institutions or cryptocurrency offering. This has been in the air of the discussion in the Democratic majority, which leads the House Financial Services Committee.
In a sign of widening scrutiny after Facebook Inc’s proposed Libra cryptocurrency coin has agitated a widespread objection, and the bill proposes a fine of $1 million per day for violation of such rules. Such proposals would likely raise opposition from the Republican members of the House who believe in innovation and cryptocurrency, and they will have to fight to gather more votes to pass.
The report further said,
“Even if it were to pass the full House, it would still have to pass the Senate, which would also likely be an uphill struggle. Nevertheless, the draft proposal sends a strong message to large tech firms increasingly eyeing the financial services space. The draft legislation, “Keep Big Tech Out Of Finance Act,” describes a large technology firm as a company mainly offering an online platform service with at least $25 billion in annual revenue.
“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a 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, it proposes.”
The proposal for this bill has been followed after the criticisms made by the President of the U.S. Donald Trump. The criticism mainly was focused on Facebook’s new cryptocurrency offering and Bitcoin. The President’s comments followed after the Jerome Powell; The Federal Reserve Chairman informed the government that the cryptocurrency of Facebook- Libra not to proceed unless all the concerns were answered. The main concerns were -money laundering, privacy issues, financial stability.