The power of Facebook, Google and Co. is already huge anyway. A successful own cryptocurrency would only strengthen this dominance. That’s why some US Senators are already working on a new law. Will Facebook Libra ever come?
In June 2019, Facebook introduced its own crypto currency, the Libra Coin. It should appear in 2020 and allow it, without its own bank account, to send money to other users, to build up reserves or to buy objects or services.
In short, Facebook Libra has the potential to revolutionize financial infrastructure around the world. And just this big vision of Facebook could end the project even before the actual start.
The “Keep Big Tech Out of Finance Act” and its importance for Facebook Libra
The reason for the premature end of Facebook Libra lies in a new bill. This is the outspoken name of “Keep Big Tech Out of Finance Act” and is currently being discussed in the Finance Committee of several US Senators. The majority of the panel belongs to the Democrats.
Specifically, politicians are concerned with limiting the market power of large platforms and networks. The regulation is intended to prevent Facebook and co. From becoming a financial institution themselves or being closely associated with such an institution.
Of course, neither the name Facebook nor the Libra Coin falls. Nevertheless, it is clear what the senators are all about. This is reflected in the framework conditions of the law:
- An annual turnover of at least 25 billion US dollars is the basis.
- Affected are companies that offer a public marketplace, exchange or platform to connect with third parties.
- Those companies may not import or operate cryptocurrencies that are used on a large scale as a unit of account, investment or similar function.
Anyone who violates the law with their own projects will be punished with a fine of one million US dollars per day.
The rules and guidelines of the new law make it clear that there is no point in keeping smaller platforms from developing their own currencies. This is shown by the very high minimum sales.
“Tip: If you sign up to Coinbase using this link to trade cryptocurrencies, you’ll get $ 10 in Bitcoin if you trade at least $ 100 and we also get a small commission. “
Instead, Facebook, Amazon, Google and Co. should be prevented from building up a foothold in the financial industry. Because at the latest then it would be virtually impossible to smash the big tech companies. Your market power would be too big.
Even Donald Trump supports the thrust of the law
Surprisingly, the driving Democratic MEPs themselves could count on the support of US President Donald Trump. This one has a problem with Facebook, Google and Co. anyway and also has a split relationship to cryptocurrencies.
… and International. We have only one real currency in the United States, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the world, and it will always stay that way. It’s called the United States Dollar!
– Donald J. Trump (@realDonaldTrump) July 12, 2019
On Twitter, Trump wrote that the Facebook Libra, for example, was not reliable. He emphasized, “If Facebook or any other company wants to become a bank, like all national and international banks, they have to stick to bank regulations.”
- Bitcoin power consumption: The cryptocurrency consumes more energy than Switzerland
- These are the 10 most expensive cryptocurrencies in the world
- Facebook Libra: Is the first global form of payment now coming?
- Image gallery: This is how Facebook works in Berlin
Your job market in the digital world
We do what we love every day. You can do that too! Over 20,000 dream jobs in the IT and digital world are just waiting for you in the BASIC thinking job market. Just take a look and discover!
Also interesting for you
About the author
Christian Erxleben has been Editor-in-Chief of BASIC thinking since the end of 2017. Previously, he worked as Head of Social Media and Head of Social Media at BASIC thinking. His way to BASIC thinking was via the Nrnberger Nachrichten, Focus Online and the INTERNET WORLD Business. Professionally and privately he loves and lives social media.