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U.S. Proposes To Ban Major Tech Companies From Offering Financial Services

By Yana Berman

U.S. authorities introduced a bill that aims to bar major tech companies from acting as financial institutions, Reuters wrote Monday, July 15.

A new draft dubbed “Keep Big Tech Out Of Finance Act” was presented to the Financial Services Committee for discussion in the context of disputes behind Facebook’s much-anticipated cryptocurrency Libra.

Apart from banning tech giants from launching financial products, the paper also offers to prevent them from issuing own digital currencies. In case of violation, the company will be obliged to pay $1 million per day.

The Democratic majority, which was behind the legislation, will likely meet with open opposition from the Republicans who usually support the innovation. Therefore Reuters believes the draft will not make it to the lower chamber. 

Facebook presented its own digital currency Libra in mid-June. The blockchain ecosystem for the project is set to launch in the first half of 2020, along with the company’s own crypto wallet Calibra.

U.S. Senate Banking, Housing and Urban Affairs Committee held a panel on Libra today, hearing the testimony from tech giant’s representatives.

President Donald Trump recently slammed cryptocurrencies, including Libra, in a series of tweets. He supposed that Facebook’s digital currency will have “little standing or dependability” and urged tech giant to become subject to all banking regulations in case it wants to offer financial services.

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