‘Keep Big Tech Out of Finance’ Says the Congress

| Updated
by Teuta Franjkovic · 4 min read
‘Keep Big Tech Out of Finance’ Says the Congress
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It seems that big companies as Facebook, Amazon and Google might be forbidden to launch their digital assets. If the Congress’s Bill pass – they could face with paying $1K penalties per day. Even though it’s not likely for bill to pass, it presents another obstacle for Facebook’s Libra.

Congress decided to draft a bill dubbed “Keep Big Tech out of Finance” meant to prevent large tech companies from becoming finance companies and launching digital assets. The document reads:

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.”

Also there are penalties:

“Any large platform utility or financial institution that violates … shall be subject to a fine of not more than $1,000,000 per each day of such violation, in an action brought by the approppriate Federal financial regulator.”

This sounds like a big bullish run for Bitcoin even though it is not officially confirmed. The alleged bill is defining “a large platform utility” as a tech company that earns annual global revenues in excess of $25 billion.

Crypto analyst Anthony Pompliano tweeted:

He mentions something called regulatory moat as a great move scenario describing a Bitcoin rise. Just to remind you, the word “moat” is created by Warren Buffett himself and it means literally a distinct advantage a company has over its competitors which allows it to protect its market share and profitability. It is often an advantage that is difficult to mimic or duplicate (brand identity, patents) and thus creates an effective barrier against competition from other firms. It is for sure that Bitcoin “per se” has this advantage created through years of its existence.

Nevertheless, this is pretty much interesting for big companies as Facebook, Amazon and Google who all said they will, or that they’re thinking about creating their own cryptocurrency – or at least involving existing cryptocurrencies into their own ecosystem.

Facebook’s Libra is expected to launch in the first half of 2020. However, last few months it is constantly being under attack and criticism from many corners. Chair of the Financial Services Committee Maxine Waters initiated the congressional hearings on Libra on June 18 by calling for a moratorium on the project. Facebook will address Committees in the Senate on Tuesday and House of Representatives on Wednesday about its Libra cryptocurrency.

Also, from Amazon they said they would consider discussing the creation of its own cryptocurrency like Facebook’s Libra but in several years’ time. And don’t forget that two years ago, Amazon registered a number of new crypto-related domains, including AmazonEthereum.com, AmazonCryptocurrency.com, and AmazonCryptocurrencies.com.

Be it as it may, tech giants including Amazon, Google and Yahoo!, are making moves, indicating that cryptocurrencies will soon become a bigger part of their platform. Will those companies follow Facebook’s idea and start new companies outside the U.S. – it’s for us to wait and see.

And while U.S. Congress is trying to stop this “heresy”, on the same time, it doesn’t speak much of financial companies that are also squeezing themselves in cryptocurrency space. JPMorgan for example revealed their project JPM Coin in February this year and said they intent to launch pilot testing of JPM Coin with selected clients “around the end of the year” .

Congress obviously doesn’t care that the same bank is involved in one of the biggest drug arrest that happened earlier this month. Just for a reminder, US customs officials seized a container ship financed by JPMorgan this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion in the vessel. Bank didn’t comment, the ship hasn’t been taken away from the company and yet, the biggest problem seems to be tech companies wanting to make their business easier and decentralized. Oh well.

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