A mysterious bill, titled “Keep Big Tech out of Finance”, dated 12th July, has surfaced online that has made people scratch their heads. The bill was reportedly presented to the Financial Services Committee of the United States House of Representatives.
First, a bit of refresher on the events of the recent past in regards to Facebook’s crypto project, called Libra. Facebook launched a white paper on Libra on 18th June 2019 which was celebrated all across the crypto world. However, the number of skeptics was more than the people who praised the currency.
Just hours after the launch of the paper, the United States Senate called Facebook’s Libra team for a hearing scheduled for July. Since then, numerous senators and house representatives have snubbed Facebook’s dive into the financial world and have been calling it an invasion of finance by Big Tech.
Many skeptics have been trying to stop Facebook from launching Libra as it will give the world of cryptocurrencies the normalizing factor that the sector has always lacked.The proposed bill, as discussed above, seems to be an attempt to do exactly that.
Even though the exact nature and details of the bill are not confirmed, like who presented it and how it got leaked. The Block quotes an inside source with the Financial Services Committee saying that the bill is true, with the committee confirming the legitimacy of the bill. The bill proposes some wild measures. The document 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.
The bill then goes on to define a “large platform utility” as a tech company that has an annual global revenue equal to or more than 25 billion USD. It is expected that the bill was never supposed to be passed and was just an attempt at swaying the decision of the committee against Libra.
The timing of the bill, right before Libra team is scheduled for a hearing before the the Senate’s Banking Committee on 16th and another hearing before the House Financial Services Committee, is a blatant attempt to sway the decision against Facebook and its partner companies and stop Libra from being launched.
Unlikely Opposition for Facebook’s Libra
….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. 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…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Libra has found a lot of enemies in a lot of big places. Even the President of the United States on July 11 tweeted about Libra, showing concerns about the exact lawfulness of using crypto and the regulations regarding crypto usage.
The July 17th hearing was called by the Chair of the Financial Services Committee Maxine Waters on the day the project was announced. Waters’ skepticism arises from Facebook’s past performance with handling user privacy. She wrote in a statement:
Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.