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The US suggests that technology-saving companies do not provide financial services



A visual representation of digital cryptocurrency coins on display in front of Facebook and Libra logos.

Chesnot | Getty Images

A suggestion to prevent major technology companies from acting as financial institutions or issuing digital currencies has been circulated for discussion by the majority of the Democratic majority chairing the House Financial Services Committee, according to a copy of the bill seen by Reuters.

In a sign of extended review after Facebook's proposed Libra digital coin aroused widespread objections, the bill suggests a $ 1

million per day penalty for violating such rules.

Such a false 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 would also be an uphill battle.

However, the draft proposal sends a strong message to large technology companies that are eyeing financial services.

Over the t-law, "Keep the Big Tech Out of Finance Act," describes a large technology company as a company that offers a $ 25 billion annual annual revenue online platform service.

"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 board of the Federal Reserve System," it suggests.

Facebook, which qualifies to be such an entity, said last month that it would launch its global crypto competition in 2020.

Facebook and 28 partners, including Mastercard, PayPal and Uber, would form the Libra Association to govern the new coin. No bank is currently part of the group.

Last week, US President Donald Trump criticized Libra and other cryptocurrencies, demanding companies seek a bank charter and make themselves subject to US and global rules if they wanted to "become a bank."

His comments came after Federal Reserve Mayor 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.


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