Just before the Facebook Libra Hearings, a draft law to bar Libra from becoming a reality has emerged. The draft law, which leaked on July 13, seeks to prevent the big tech companies from engaging in finance and cryptocurrencies.
From this draft, a section provides that broad technological utilities cannot become financial institutions or bear any affiliations with a financial institution. Such technology utilities include any organizations with annual revenues surpassing $25 Billion, and whose core business is to offer an online exchange, a platform or a marketplace.
The law primarily targets Libra and Facebook as the US Congress seeks a legislative redress to the open criticism that Libra Project has received since its announcement on June 18. The main aim of the “Keep Big Tech Out of Finance Act” is to make it illegal for big technology companies to become financial institutions or influencing the financial environment directly or indirectly.
Congress is highly interested to understand the intent of Libra concerning data privacy and how data will be protected under the proposed Libra Project. Facebook has had a history of privacy misappropriation where Cambridge Analytica is accused of using Facebook data to promote specific political endeavors in some countries. The social media giant is expected to pay a $5 billion fine slapped by the Federal Trade Commission over the violation of user privacy, which affected millions of Facebook users.
If the proposal becomes law, Facebook will have to rethink the Libra Project – a move that could delay the launch of Libra or deter its success.