A draft discussion bill has surfaced online that targets big tech companies attempting to expand into finance. In an effort to stop competition with the US dollar, the bill seeks to prohibit tech giants from spinning up new cryptocurrencies and offering financial services.
Entitled Keep Big Tech out of Finance, the document was allegedly drafted by the United States House of Representatives Financial Services Committee, according to source quoted by The Block.
The document precedes two upcoming congressional hearings with Facebook to address its cryptocurrency project Libra, a stablecoin that is scheduled to launch in 2020, pending regulatory approval. Despite efforts by Facebook to build a consortium comprised of a number of companies with a stake in its new financial services platform Calibra, the project has sparked concern and controversy among regulators around the world over the role of big tech companies, the power of Facebook’s global reach, privacy issues, the protection of consumer data, and how such a revolutionary offering that powers cross-border payments for people all over the world could compete with the US dollar.
The document enumerates a number of anti-competition objectives that are designed to stop computer scientists and big tech companies from challenging the government’s monopoly over money.
It reads,
“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.”
…
“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.”
“A large platform utility” is defined as a tech company that earns over $25 billion in annual global revenue and that can connect users through an online marketplace, exchange or a platform for connecting third parties.
In addition to Facebook and its 2.5 billion users, such legislation would effectively prohibit a number of large tech companies with massive userbases, such as Google and Amazon, from producing a digit asset.
As regulators grapple with Facebook and the threat of Libra, industry commentators and crypto enthusiasts point out that Bitcoin and truly decentralized cryptocurrencies cannot be stopped or shut down.
Addressing the power of blockchain technology and how cryptocurrencies are on track to revolutionize global finance, CNBC’s Joe Kernen says,
“You can take [money friction] to zero. Do you know how powerful that would be? It’s going to put a lot of people out of business. This is the kind of creative destruction – it’s like trying to stop the industrial age. You can’t.”
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