U.S. Lawmakers Seek to Prevent Tech Companies from Entering Financial Industry

The growing penetration of tech companies in the payments industry has created a major threat for the existing players and even more for the global regulatory agencies. The recent announcement of Facebook’s Libra has already got lawmakers to think seriously of the emergence of the crypto industry.

The lawmakers are seeing it as a potential threat to the traditional financial frameworks and fiat structures. Recently, even the US President Donald Trump shot some criticism for cryptocurrencies and Libra.

Trump in his tweet stated: “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 and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”

Now some U.S. lawmakers have proposed to prohibit big tech giants as financial institutions or issuing digital assets. As reported by Reuters, a proposal was circulated “by the Democratic majority that leads the House Financial Services Committee”.

The draft bill titled “Keep Big Tech Out Of Finance Act,” has a section of “Prohibition of Cryptocurrencies” which state: “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 states that any tech company with over $25 billion in revenue falls in this category. It also proposes a massive fine of $1 million per day if companies are found to be violating the rules.

Note that the bill has not been formally submitted and is currently in the discussion draft form. But it clearly shows the threat among the lawmakers with the entry of Facebook’s Libra.

In addition to Facebook, almost every other tech giant like Amazon and Google seems to be interested in using crypto assets to overhaul their payments platforms. Note that Amazon has already a few crypto-related domains registered to its name like the AmazonEthereum.com, AmazonCryptocurrency.com, and AmazonCryptocurrencies.com.

Well, it would be surprising to see that if the lawmakers are blocking tech giants towards pursuing the crypto route, what it has to say about banking giants like JPMorgan who is working on the JPM Coin.