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Democrats in Congress are considering a new bill that would put an end to Facebook's cryptocurrency projects. The new bill, called the Financial Expenditure Restraint Act, would explicitly prohibit large platform companies from performing banking functions. The bill would be a direct rebuke to Facebook's plans with Libra cryptocurrency, which should probably be divorced from society if the bill were introduced and passed.
The bill has not yet been introduced in Congress and, therefore, its content is far from definitive. Nevertheless, the subject aroused keen interest as Facebook representatives appeared before the House Banking Committee on Wednesday. The edge obtained a copy of the bill that was circulated for discussion.
The text of the bill simply says "A great platform utility may not be, and can not be affiliated with anyone who is a financial institution," with additional sections explaining the definitions of various terms. More specifically, "large platform utility" is defined as "a technology company with an annual global turnover of $ 25 million or more … primarily engaged in offering to the public an online market, exchange or platform for connection to third parties. evenings."
The meaning of such a rule is unclear for technology-based financial companies such as PayPal or Square if they realized annual sales of $ 25 billion.
However, this would certainly apply to Facebook and exclude any involvement in Libra as an affiliation to a financial institution. It remains to be seen what will be the legislator's support for the bill, but the bill raises significantly the stakes, while the Facebook executive and the architect of Libra David Marcus are visiting on the Hill for this week's House and Senate hearings. Several of the same legislators had previously asked Facebook to suspend the development of the project.
The project has already generated significant skepticism on the part of the executive. In a briefing this morning, Treasury Secretary Steve Mnuchin expressed his fear that the project would be more useful to criminals than to legitimate users. "The Treasury Department has expressed very serious concerns that Libra could be misused by money launderers and financiers of terrorism," Mnuchin said. "We will not allow digital asset service providers to operate in the dark."
Makena Kelly contributed to the writing of this article.
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