U.S. proposes barring big tech companies from offering financial services, digital currencies
15 Jul 2019

A proposal to prevent big technology companies from functioning as financial institutions or issuing digital currencies has been circulated for discussion by the Democratic majority that leads the House Financial Services Committee, according to a copy of the draft legislation seen by Reuters.

In a sign of widening scrutiny after Facebook Inc’s (FB.O) proposed Libra digital coin aroused widespread objection, the bill proposes a fine of $1 million per day for violation of such rules.

Such a sweeping proposal would likely spark opposition from Republican members of the house who are keen on innovation, and would likely struggle to gather enough votes to pass the lower chamber.

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 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.

Facebook, which would qualify to be such an entity, said last month it would launch its global cryptocurrency in 2020.

By Ismail Shakil and Pete Schroeder, Reuters, 14 July 2019

Read more at Reuters

Photo: Carlos Ramón Bonilla [CC BY-SA 3.0], via Wikimedia Commons

Advance your CPD minutes for reading this article, by signing up and using the CPD Wallet

FREE CPD Wallet
One Response to “U.S. proposes barring big tech companies from offering financial services, digital currencies”
Keslyn Gilbert

Keslyn Gilbert July 15, 2019

This is interesting. The issues are complex and interrelated, from restraint of trade to fair competition and monopolizing. Perhaps the courts have to eventually settle this.

You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.