Cryptocurrency investment and tools such as a crypto tracker or wallet have become famous and well-received over the last years. However, Facebook’s cryptocurrency announcement sparked negative reactions from entities and governments around the world.
The Democratic majority of the United States House Committee on Financial Services is considering to ban big tech companies from involvement in the financial system. This includes operating as a financial institution as well as issuing crypto coins.
After Facebook, the world’s largest social media platform, announced its new cryptocurrency, the government of the United States and other jurisdictions reacted rather harshly. Facebook was called for a hearing in the Senate. The government is skeptical of the company and believes that it is already too big and has a history of violating the privacy of users.
The newly proposed bill charges one million dollars a day for violating the law. However, considering the radical nature of this proposal it will most likely encourage resistance from the Republican portion of the House of Representatives. They seem to be more enthusiastic about innovative technology, so the bill probably won’t pass the House of Representatives. Yet, if the bill manages to pass the lower chamber, the Senate would be hard to win.
No matter if the bill passes or not, the proposal is a powerful warning to big tech companies that are gradually trying to enter the financial system.
The proposal to keep large technology companies out of the financial industry defines a big tech company as a firm providing platform service with a minimal annual revenue of twenty five billion dollars.
The bill suggested that a platform, such as Facebook, can not create or manage a cryptocurrency meant to be used as a means of exchange or anything with a similar purpose.
Facebook, that would be in this category, had announced last month that its crypto coin, Libra, would launch next year. Libra would be a stablecoin, a cryptocurrency pegged to an asset with a stable value.
It also would be governed by the Libra Association that is planning to have 100 members by the time Libra launches. Currently, the Association has 28 members including Visa, Uber, Women’s World Bank and so on.
A week ago, the Chair of the Federal Reserve also announced that the Libra project will not continue If the company doesn’t address certain concerns. Thereafter, The President of the United States, Donald Trump, also expressed his distrust towards Bitcoin, Libra and other crypto coins in a series of Tweets, saying that he’s not a fan of them. He also said that if big tech companies want to enter the financial system they need to do it the right way.
President Trump also stated that crypto coins can be dangerous since they are heavily involved in illegal activities. After that, the President praised the US national currency calling it very reliable.
Even though big tech companies are being pushed from the crypto sphere, cryptocurrency is increasingly growing in popularity. If you want to be a successful crypto trader, check out this comprehensive guide on crypto portfolio management.