US lawmaker has reportedly introduced draft bills to New Cryptocurrency Laws for 2020. These bills will bring regulatory clarity in the crypto sector. Besides, these bills will offer comprehensive regulations for tech companies, including Facebook.
02 January, 2020 | AtoZ Markets – The world of cryptocurrencies enters in 2020. US lawmakers are drafting bills to bring clarity around stablecoins. And these offer regulations for tech companies like Facebook who may want to create their own cryptocurrencies.
New Cryptocurrency Laws Regarding Libra
US lawmakers draft new cryptocurrency laws for 2020. Dubbed the Keep Big Tech Out of Finance Act, the new bill was proposed on July 15, 2019, by the Democratic majority of the House Financial Services Committee. This law targets explicitly Libra, a new digital currency spearheaded by Facebook. But the proposal aims to prevent large tech companies from operating as financial institutions.
According to the bill, a large technology company is described as a company offering an online service with a minimum of $ 25 billion in annual revenue. The bill proposes precisely that:
“A large platform service cannot establish, maintain and operate a digital asset. That is widely used as a means of exchange, unit of account, store of value or any other similar function. The Board of Governors of the Federal Reserve System defined it.”
Facebook Still Plans to Launch Libra
Facebook (which instantly qualifies as a large tech company) still has plans to launch Libra and continues to develop the stablecoin network today. It also plans to introduce a series of new features in the coming months. That was according to a press release issued on November 15.
Although Facebook has yet to set a release date for Libra, regulators around the world are expressing concern.
As a followup to the Keep Big Tech Out Of Finance legislation, Chairwoman Maxine Waters expressed her negative feelings towards Libra. She asked Facebook to put it on hold during her opening statement of July 17:
“In light of these and other concerns, I and my colleagues wrote to Facebook earlier this month. And we were asking to stop implementing its plans. It was until regulators, and Congress can review issues associated with a large tech company developing a digital currency. The Independent Community Bankers of America (ICBA) and others support this common-sense measure.”
Facebook has remained fairly silent after Congressional hearings about Libra. But the Keep Big Tech out Of Finance proposal would allow federal regulators to impose fines of up to $ 1 million a day for violations.
To follow the rules, large tech companies will likely think twice before launching its own currency and/or exercising banking functions.
Think we missed something? Let us know in the comments section below.