Troubles for Facebook’s Project Libra does seem to end anytime soon, as the new proposal by the Democrats might invite heavy penalties if it continues to pursue it. The new proposal demands a fine of $1 million per day for violation of rules proposed if they are implemented.
The new proposal put forth for discussion could prove to be harmful to Facebook’s crypto dreams, as the Democrats lead the House Financial Services Committee in the majority. The proposal demands that big tech companies like Facebook must be prevented from functioning as financial institutions or even launching cryptocurrencies. However, even if the House passes the proposal, which they will give Democrats’ majority, it will most certainly be declined in the Senate.
The proposal is titled ‘Keep Big Tech Out Of Finance Act’, and classifies any company offering online services/platform with a minimum annual revenue of $25 billion as a big tech company. It further states,
“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,”
It will be interesting to see how the House will react to the argument that Libra is not a project backed by Facebook alone, but also by other big finance-related companies like VISA, PayPal, MasterCard, etc. Though no bank is yet a part of the founder members, Facebook has time till the token’s official launch in early 2020. After this new proposal, the social media giant will be keen to bring a major bank on board, which would ease any possible complications.