Monday, 15 July 2019 11:22

Bid to block big tech firms from offering financial services

Bid to block big tech firms from offering financial services Pixabay

The Democrat majority on the US House Financial Services Committee is proposing a bill that that would prevent big technology firms from operating as financial units or issuing digital currencies, a move that seems to be aimed at Facebook after the social media behemoth announced last month that it would be launching its own cryptocurrency in 2020.

Reuters reported that the draft bill had recommended a fine of US$1 million per day for any violation of the rule.

Facebook said it would launch the Libra cryptocurrency in next year through a new subsidiary Calibra which will also supply the digital wallet for the new currency.

The company said the wallet would be available in Messenger, WhatsApp and also as a standalone app, and that it would take steps to protect users' privacy.

The "Keep Big Tech Out Of Finance Act" proposed by the Democrats defines a big technology company as one that offers an online platform and pulls in at least US$25 billion revenue each year.

The bill is likely to meet resistance from Republicans in the house and even if it passes the house, it would be difficult to get such a measure through the Senate.

US President Donald Trump has criticised the Facebook move and told firms which wanted to "become banks", that they should obtain a banking charger and conform to US and global rules for such activities.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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