A US law proposes to ban internet giants from creating their cryptocurrencies

Calibraapp.

After Facebook's announcement of Libra, a cryptocurrency that should allow its two billion users to buy goods or send money as easily as an instant message.

Libra must introduce a new means of payment outside of traditional banking channels and is the cornerstone of a new financial ecosystem without the barrier of different currencies. This Facebook initiative has drawn attention from global policy makers, especially bankers and politicians, including Jerome Powell, Chairman of the US Federal Reserve

Who believes that it is important to solve many things:

According to him, "Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability" and these concerns need to be addressed "in depth and in public before moving forward".

Powell said Fed officials had met on Facebook before the company announced plans for Libra and that his organization was looking into the matter.

His agency fears that the broad adoption potential of Facebook's cryptocurrency, a social network that has more than two billion users, may in the future pose a threat to the financial system in general and to the dollar in particular.

US financial regulators appear to fear that Facebook will succeed in "establishing a parallel system of banking policy and monetary to rival the dollar 'through Libra.

Bankers and Politicians against Libra

Faced with this situation, Democrats in Congress are considering a new bill that would put an end to Facebook's ambitions in the cryptocurrency universe.

The new bill, called "Keeping Big Tech Out of Financial Law" (or regulation to keep tech giants out of finance), would explicitly prohibit large internet companies from operating as banking institutions to issue digital currencies.

The bill proposes a fine of $ 1 million per day for violating these rules.

The bill has not yet been introduced in Congress. As a result, its content is far from final, sources close to the archive indicated.

However, this case is already arousing the interest of regulators. Representatives from Zuckerberg's company appeared before the House Banking Committee, the House Finance Committee, in this case.

Jerome Powell who intervened last week and asked Facebook to suspend the Libra project, until the concerns of financial market regulators are completely allayed.

The "Keep Great Technology Out of Funding Act" defines a large technology company that primarily offers an online platform service and whose annual revenue is greater than or equal to $ 25 billion. It stipulates that this type of company cannot in any case “establish, maintain or exploit a digital asset intended to be widely used as a medium of exchange, unit of account, storage of value or any other similar function, as defined by the Board of Governors. of the Federal Reserve System «.

En este sentido, Donald Trump shares the point of view of unfavorable decision makers, bankers and politicians to cryptocurrencies.

And he wrote on Twitter:

"If Facebook and other companies want to become a bank, they must look for a new banking charter and be subject to all banking regulations, like other banks, national and international." "I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is very volatile and based on air," he added.

The consequences of adopting such a regulation are unclear for technology-based finance companies like PayPal or Square. But the restrictions on the tech giants: Facebook tops the list with the financial support of about 28 companies in the finance, e-commerce, technology and telecommunications sectors in its project.


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