According to reports, in order to strengthen its desire of heightening the issue of financial security after the announcement of Facebook’s Libra, US lawmakers are now said to be considering placing a nationwide ban on the issuance of cryptos by large tech corporations.
This report comes at a time when there has been a growing concern among Congress and other stakeholders over Facebook’s latest cryptographic project.
On Monday, July 15, it has been revealed that lawmakers are working on a new legislation to cub tech giants from issuing crypto. The draft bill is been circulated by the Democratic Party states that the U.S. Congress has proposed to place a ban on big tech corporations trying to play a similar role with financial institutions. Such as the issuance of digital currency.
What are the Terms of the Draft?
Per the report, under the crypto section of the draft, the proposal bans big tech corporations from issuing or circulating of digital assets. It also debars the handling of cryptos as a means of exchange or as a store of value. Any corporations that fall short will face a fine that can be as high as one million USD ($1 million) on each day they violate the regulation.
Moreover, the new legislation specifically defines cryptocurrency as currencies, including coins (but not limited to that alone), tokens or any type of digital asset class, that are either regulated or exchanged via a decentralized model and distributed archives/Blockchain technology.
Corporations Yielding $25 Billion and Above in Yearly Revenue Fall into the Class of Tech Giants
The draft bill goes on to specify the type of companies that fall under the category of large tech corporations. The draft bill states that any tech firm that is yielding an annual revenue of $25 billion (twenty-five billion USD) is strictly required to comply with the new regulation. Failure to do so will warrant a penalty of $1 million for each day the firm fails to comply.
What are the Implications of the Bill?
The proposed legislation will have huge implications for tech giants who may want to follow Facebook by issuing their own crypto. Apart from that, Facebook’s cryptographic project may be hit hard. In the event that the proposed bill becomes legislation, it would be a huge blow for the tech giant’s as their Libra launch preparations have been in full swing. Facebook has already scheduled a launch date for its initiative next year.
Additionally, firms like MasterCard, PayPal and Uber, who have all endorsed the Libra coin and intend to play a huge role in the governing of the initiative, would be hit hard as well.
The report about this new proposed legislation, came to light only one week after US President, Donald Trump took a dig at digital assets. At the time, Trump questioned the credibility of cryptos.
While the proposed law is still in the early stages, it is expected to receive huge censure from the members of the Republican Party. This is an issue considering the fact that the Republican members of Congress have shown a keen interest in the promotion, of a digital economy in the United States.