House Democrats mull bill to ban Facebook cryptocurrency project

House Democrats mull bill to ban Facebook cryptocurrency project
© Greg Nash

Democrats on the House Financial Services Committee are considering a bill that would ban major social media and technology companies from providing financial services and offering digital currencies.

The measure, outlined in a discussion draft obtained Monday by The Hill, appears to target Facebook’s Project Libra, a proposed cryptocurrency-based payments system. 

Called the Keep Big Tech Out of Finance Act, the bill would apply to any company with at least $25 billion in annual revenue that offers “an online marketplace, an exchange, or a platform for connecting third parties.”

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Covered firms would be banned from creating and operating digital currencies, a provision clearly targeted at Facebook’s Project Libra. But the measure’s broad parameters could also effectively outlaw financial products offered other major tech firms.

Companies subject to the bill — which appear to include Facebook, Google and Amazon — would also be banned from offering a slew of financial services such as banking, investment management, securities exchanges, financial advice and money transmission.

Lawmakers and regulators in both parties have expressed fears about Libra and Facebook’s ambitions in the financial services industry. Even so, the proposed bill would likely face substantial opposition from Senate Republicans concerned about regulatory overreach in the financial sector. 

The emergence of the bill, first reported by Reuters and Bloomberg Law, comes a day before Libra chief David Marcus testifies before the Financial Services panel.

Marcus is expected to tell Congress this week that the company will launch its digital coin after related regulatory concerns are "cleared up.”

Facebook is one of more than two dozen companies backing Libra, which will be run by a Swiss nonprofit separate from the social media giant. But the system will employ a digital wallet called Calibra, which is run by a Facebook subsidiary.

Critics of Libra say Facebook’s immense scale, influence and consistent issues with data security and privacy could pose severe dangers to global financial stability. 

Rep. Maxine WatersMaxine Moore WatersOvernight Health Care: White House projects grim death toll from coronavirus | Trump warns of 'painful' weeks ahead | US surpasses China in official virus deaths | CDC says 25 percent of cases never show symptoms Democrats, Trump set to battle over implementing T relief bill Maxine Waters unleashes over Trump COVID-19 response: 'Stop congratulating yourself! You're a failure' MORE (D-Calif.), chairwoman of the Financial Services Committee, has called on Facebook to suspend Libra until regulators and lawmakers are comfortable with the project.

Dozens of other members of Congress have expressed similar concerns, and Federal Reserve Chairman Jerome Powell said last week that Libra could be subjected to strict capital and liquidity rules imposed on megabanks. 

President TrumpDonald John TrumpSenators demand more details from Trump on intel watchdog firing Overnight Health Care: Trump steps up attack on WHO | Fauci says deaths could be lower than first projected | House panel warns federal stockpile of medical supplies depleted | Mnuchin, Schumer in talks over relief deal Trump says he'll look into small business loan program restricting casinos MORE also weighed in last week, tweeting Thursday that he was “not a fan” of cryptocurrencies and suggesting Facebook should apply for a national bank charter if it wished to enter the financial services industry.