House Discusses Proposal To Keep Big Tech Out of Finance

The House Financial Services Committee is discussing the “Keep Big Tech Out of Finance Act”, draft legislation that would prohibit large technology companies like Facebook and Amazon from offering cryptocurrency and other financial services. The bill was proposed after Facebook announced that their cryptocurrency Libra would launch in 2020, causing public backlash. President Trump demanded that Facebook seek a banking charter if it wants to “become a bank,” while Jerome Powell, Chairman of the Federal Reserve, told lawmakers that Libra could not move forward until it addresses his concerns regarding:

  • Privacy
  • Consumer protection
  • Financial stability
  • and Money Laundering.

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Facebook plans to launch its global cryptocurrency with 28 partners, including Mastercard, Paypal, and Uber while not including any banks.

Under the bill, companies would be fined one million dollars each day that it offered financial services or cryptocurrency, according to a report from Reuters. As the House Financial Services Committee has a Democrat majority, this proposal is likely to garner opposition from Republican House and Senate members who are “keen on innovation,” wrote Pete Schroeder and Ismail Shakil in the Reuters article.

big-tech-financial-services
The United States House Financial Services Committee is currently discussing whether big tech companies should be able to provide financial services and cryptocurrency.

The proposed legislation defines Big Tech as a company with an online platform that has $25 billion or more in annual revenue. It 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.”

Regardless of whether the draft legislation passes or not, it is clear that the government is keeping an eye on large technology firms and their financial services.

Aliza Vigderman

Aliza Vigderman

Aliza is a journalist living in Brooklyn, New York. Throughout her career, her work has spanned many intersections within the tech industry. At SquareFoot, a New York-based real estate technology company, she wrote about the ways in which technology has changed the real estate industry, as well as the challenges that business owners face when they want to invest in property. At Degreed.com, an education technology website, Aliza created digital content for lifelong learners, exploring the ways in which technology has democratized education. Additionally, she has written articles for The Huffington Post as well as her own content on Medium, the online publishing platform. Aliza’s love of journalism and research stems from the excellent Journalism program at Brandeis University. At Brandeis, Aliza interned as a research assistant at the Schuster Institute for Investigative Journalism, a non-profit “news room without walls”. There, Aliza was paired with an investigative journalist and used academic databases to obtain data on everything from the suicide rates in Bhutan to local Boston court cases. Her last position was as an account executive at Yelp, educating business owners on the power of technology to increase revenue. Throughout, however, her heart remained with tech journalism, and she’s thrilled to be writing for Security Baron. When she’s not keeping afloat of the latest tech trends, Aliza likes to cook, read, and write. A former high school “Class Clown,” Aliza has completed two feature-length screenplays, a pilot, and countless comedic sketches. On her days off you can find her relaxing in Prospect Park, trying the latest flavors at Ample Hills Ice Cream, and spending time with friends and family.

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