Facebook’s proposed Libra cryptocurrency has caused such a stir among U.S. politicians that some of them have started preliminary talks aimed at creating a bill to keep big tech firms off the levers of monetary power. The draft bill, catchily titled, “Keep Big Tech Out of Finance Act,” is aimed at preventing tech giants such as Amazon, Google, Apple, and Facebook from becoming financial institutions and shows just how paranoid the government has become in their fear that they might cede fiscal control to a digital revolution.
Congress Sets Their Sights on Big Tech
The bill’s chief intention is to “prohibit large platform utilities from being a financial institution or being affiliated with a person that is a financial institution”, defining ‘large’ as any technology company with an annual global revenue of more than $25 billion. Businesses engaged in the practice of offering online public marketplaces, exchanges, or platforms to connect third parties will be caught in the net. A $1 million daily fine would be the cost for transgressors.
Alongside this, the bill aims to prohibit these same companies from “establishing, maintaining, or operating a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value.” If that doesn’t speak of concern for the fragility of the currency system that we don’t know what does.
All Eyes on Facebook
Given that the bill is only at the discussion stage and doesn’t yet have an official lead it is not yet clear if it will go anywhere, but it is self-evident that any such bill will have huge support from the banking lobbies who can exert tremendous power and will do all the can to retain the status quo.
Much depends on the outcome of the grilling that Facebook’s Libra chief David Marcus will receive from the Senate Banking Committee and the House Financial Services committee this week. The wrong answers (in the house’s eyes) could see the Keep Big Tech Out of Finance Act propelled up the legislative agenda.