Libra, a digital coin developed by Facebook race to enter into the banking sector is facing many hurdles. The Democrats of Congress are considering a bill dubbed as Keep The Big Tech Out Of Finance Act to keep the Libra out of its plans. The passing of this bill will ban the large platform companies to enter into the banking functions.
The Verge was successful to retrieve a draft of the bill that was circulated during the discussion. It says “A large platform utility may not be, and may not be affiliated with any person that is, a financial institution,” with further sections spelling out the definitions of various terms. Most notably, “large platform utility” is defined as “a technology company with an annual global revenue of $25,000,000,000 or more…predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.”
Looking over the drafted bill, Facebook passes the rule of tech companies with more than $25 Billion in revenue should not enter into the banking world. But it’s not clear that if tech companies such as Paypal or square will be disbarred if they reach $25 Billion in revenue.
While Trump administration has raised national security threat concern over the cryptocurrency plans. The Treasury secretary Steve Mnuchin said “Many players have attempted to use cryptocurrencies to fund their malign behavior. This is indeed a national security issue”. “Should Facebook develop its digital coin, called Libra, to “have a payments system correctly with proper [anti-money-laundering safeguards], that’s fine,” he added.
Amid the whole billing procedure and the comments by the representatives of government, the head of Calibra, David Marcus will head for the hearings to the US Senate Banking Committee. In Marcus vision, States and regulators will monitor Calibra as a money transmitter with the Federal Trade Commission will oversee the consumer rights. The Libra association will also register with United States’ Financial Crimes Enforcement Network to comply with sanctions.