US House of Representatives Discussion Draft: Prohibiting Technology Companies from Entering Financial Services and Digital Currency

US House of Representatives Discussion Draft: Prohibiting Technology Companies from Entering Financial Services and Digital Currency

After Facebook’s plan to launch the new digital currency Libra sparked widespread opposition, the scope of regulation began to expand. The bill proposes that if the above rules are violated, Big Technology will be fined $1 million a day.

The problem is that such a proposal may lead to opposition from Republican lawmakers in the House of Representatives, who are keen on innovation, and that this proposal may find it difficult to get enough votes in the House of Representatives.

Even if the proposal is passed in the House of Representatives, it must be passed in the Senate, and the entry into force of the bill is a long way to go.

However, the proposed draft also sends a strong message to large technology companies that are increasingly concerned about financial services.

The draft legislation, titled "Let Large Technology Companies Stay Far from Financial Business," defines a large technology company as a company with annual revenues of at least $25 billion, primarily providing online platform services.

The draft states that “large platform utility companies may not establish, maintain, or operate digital assets that are intended to be widely used in trading media, computing units, value stores, or any other similar functionality defined by the Federal Reserve System Board of Directors.”

Facebook, a large technology company, said last month that it will launch its new cryptocurrency, Libra, in 2020.

Facebook and 28 partners, including MasterCard and PayPal, will form the Libra Alliance to manage the new digital currency. There is currently no bank that is a member of the organization.

Last week, US President Donald Trump criticized Libra and other cryptocurrencies and asked companies to apply for a banking license if they wanted to “be a bank” and obey US and global regulation.

Earlier, US Federal Reserve Chairman Jerome Powell told lawmakers that the company could not advance the Libra digital currency program unless Facebook was able to address privacy, money laundering, consumer protection and financial stability. (Tencent Technology)