(Reuters) – A proposal to prevent large technology companies from acting as financial institutions or issuing digital currencies has been circulated for discussion by the Democratic majority chairing the House Financial Services Committee, according to a copy of the bill seen by Reuters.
Small toy figures are seen on virtual currency representations in front of the Libra logo in this illustration image June 21, 2019. REUTERS / Dado Ruvic / Illustration
In a sign of extended review for Facebook Incs ( FB.O ) proposed Libra Digital Coin aroused widespread objection, the bill suggests a $ 1 million fine per day for violating such rules.
Such a sweeping suggestion will probably give up against Republican members of the house who are concerned with innovation, and will probably fight to collect enough votes to pass the lower chamber.
Although it would pass the entire house, it would still have to pass the Senate, which will also be an uphill battle.
However, the draft proposal sends a strong message to large technology companies that are eyeing financial services.
The draft law, "Keep the Big Tech Out of Finance Act", describes a large technology company as a company that offers a major online platform service with at least $ 25 billion in annual sales.
"A large platform tool cannot establish, maintain, or operate a digital resource that is intended to be widely used as a means of exchange, billing, value or other similar function, as defined by the governors of the Governors of the Federal Reserve System," it suggests.
Facebook, which will qualify as such a unit, said last month that it would launch its global crypto competition in 2020.
Facebook and 28 partners, including Mastercard Inc ( MA.N ), PayPal Holdings Inc ( PYPL.O ) and Uber Technologies Inc ( UBER.N ), would form the Libra Association to manage the new coin. No bank is currently part of the group.
Last week, US President Donald Trump criticized Libra and other cryptocurrencies and demanded that companies search for a bank charter and make themselves subject to US and global rules if they wished to bank.
His comments came after Federal Reserve Chairman Jerome Powell told lawmakers that Facebook's plan to build a digital currency called Libra could not move forward unless it concerns privacy concerns, money laundering, consumer protection and financial stability.
Reporting of Ismail Shakil in Bengaluru and Pete Schroeder in Washington; Editing by Susan Thomas