US Lawmakers Consider Ban On Big Tech Companies Launching Cryptocurrencies (scmp.com) 123
PolygamousRanchKid quotes Reuters:
A proposal to prevent big technology companies from functioning as financial institutions or issuing digital currencies has been circulated for discussion by the Democratic majority that leads the House Financial Services Committee, according to a copy of the draft legislation seen by Reuters. In a sign of widening scrutiny after Facebook Inc's (FB.O) proposed Libra digital coin aroused widespread objection, the bill proposes a fine of $1 million per day for violation of such rules....
Last week, U.S. President Donald Trump criticized Libra and other cryptocurrencies and demanded that companies seek a banking charter and make themselves subject to U.S. and global regulations if they wanted to "become a bank." His comments came after Federal Reserve Chairman Jerome Powell told lawmakers that Facebook's plan to build a digital currency called Libra could not move forward unless it addressed concerns over privacy, money laundering, consumer protection and financial stability.
The article concedes this proposal "would likely spark opposition" in the House and Senate, but adds that "Nevertheless, the draft proposal sends a strong message to large tech firms increasingly eyeing the financial services space."
The draft legislation's title? The "Keep Big Tech Out Of Finance Act."
Last week, U.S. President Donald Trump criticized Libra and other cryptocurrencies and demanded that companies seek a banking charter and make themselves subject to U.S. and global regulations if they wanted to "become a bank." His comments came after Federal Reserve Chairman Jerome Powell told lawmakers that Facebook's plan to build a digital currency called Libra could not move forward unless it addressed concerns over privacy, money laundering, consumer protection and financial stability.
The article concedes this proposal "would likely spark opposition" in the House and Senate, but adds that "Nevertheless, the draft proposal sends a strong message to large tech firms increasingly eyeing the financial services space."
The draft legislation's title? The "Keep Big Tech Out Of Finance Act."
But (Score:3, Funny)
Re: But (Score:1)
The big tech companies WILL eventually end up with Crypto currencies or some other form of securities management in their portfolio of products. Why? Because that's where the world is going to go, and they didn't make their trillions by not inventing the future. Why will the world necessarily go there? There's one major weakness to non crypto currencies that countries want the rest of the world to ignore, especially the US. Traditional currencies are taxes artificially through quantities easing. When the US
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The U.S. Constitution provides for the federal government to establish standard weights and measures, including currency. There IS a valid case for this. Though, I do agree Q.E. is a problem that needs to stop.
Re: But (Score:2)
What the constitution doesn't provide for however is the authority for the government to determine that a pound is now less heavy than it was and come around and take the new pounds created by the mass of your things for spending however it pleases. That's in effect what Q.E. does.
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Good luck creating a user base, defending from 51% attacks, etc. on your shitcoin.
There is no place for smaller coins.
Re: But (Score:2)
Having more than one large company operating in the space makes this a moot issue. Especially if it became as widely used as a traditional currency.
Re: But (Score:1)
No. They can't ducking retard. Go read how blockchains and crypto currencies work before posting. Ass wipe.
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Crypto has no such shortcoming. There is a finite supply of crypto
Not necessarily. A company could create a 100% premined coin and hang on to the bulk of them. They can then mess with the value by manipulating the money supply.
Re: But (Score:2)
So? The blockchain would reveal said manipulation and it the total value would be factored in, just like the total quantity of all dollars is factored into their price.
It's growing that whole shadow economy (Score:3, Interesting)
utlawing crypto allows it to go on without being regulated. Like drugs, prostitution, and undocumented immigrant labor, free market unregulated by governmental oversight
This is a point I don't see understood very often. Some things that were winked at but accepted were things like the sex industry and other fringe areas of the economy.... there are so many areas that have been pushed out of mainstream now, I think it's grown the shadow economy to a critical mass where it can truly sustain itself at this po
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Outlawing crypto allows it to go on without being regulated
That's not the point of regulating it. Governments might not like criminals using cryptocurrency to easily move money around unseen, but that pales in comparison to the fear they have of having their own national currencies replaced. Outlawing crypto will not deter criminals, but it will keep it from replacing regular currency.
should just make them banks (Score:2)
with all banking regulations. solves the problem straight up. consider them shares or whatever you want, but same financial securities regulation in regards of selling them to public and whatever.
That's what 99% of cryptocurrency boom is about anyways in regards of big companies jumping on it with their own.
also, what difference does it even make? they can still mess with it if it's just one company that has majority control of the chain.
The bank argument (Score:5, Insightful)
The bank argument seems valid to me - if the creators of new crypto-currency also want to be the bank for that currency, they should have a banking charter and abide by applicable regulations.
Of course, this also means that gov't needs to actually give them a path to get a bank charter.
The gov't regulates the banking industry for many reasons, not all of them are 'Simon Lagree, moustache-twirling, nefarious.'
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That is the IRS's interpretation of the law. There are places that accept Bitcoin as payment for tax obligations, which would legally make it money in another regard.
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There are places that accept Bitcoin as payment for tax obligations
That doesn't make Bitcoin a currency. If my county accepted chickens for property tax payments that wouldn't make my rooster a bank.
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No, it wouldn't mean that chickens are legal tender either. The fact that a local government accepts chickens (or anything else) to pay taxes does not in any sense imply that anyone is obligated to accept them as payment of a debt—which is what "legal tender" means.
The IRS's position literally (Score:2)
Alright then, thanks for that, MORONs.
PayPal (Score:5, Insightful)
Meanwhile PayPal acts exactly like a bank but has no government protections or regulations.
Re: (Score:3)
You are not alone in thinking that. Taxi operators though that if Uber wanted to operate a taxi like service, then they should be forced to purchase a taxi licence. That's all fine and dandy unless you happen to think that taxi licences are the government regulation around them are the thing that's creating an oligopo
Comment removed (Score:5, Interesting)
Comment removed (Score:4, Informative)
I for one welcome our new decentralized overlords (Score:2)
Re: (Score:2)
if 'Satoshi', if he's still alive, (the most likely person is deceased.) moved any of his coins to an exchange, it would be instantly noticed and the price would dip before they could be put on the market.
Mmm Hmm (Score:3)
Currency named after Kal-el's canine should be kept out of the hands of tech companies in the same fashion that investment banking is kept out of the hands of neighborhood banks by Glass-Steagall... oh, wait.
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"The Democrats" repealed the law? Nice re-write of history. Glass-Steagall was repealed by the Gramm-Leach-Bliley act [wikipedia.org]. FTFA:
Odd lack of Ds in the names of the sponsors. Don't
Discrimination (Score:2)
I'll acknowledge I'm no expert on the issues, but if a bank charter is a reasonable requirement, then it will make sense for everyone. There's no reason to single out big tech companies or any other specific industry.
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There are numerous limitations on what a company that is a bank can or cannot do (for example separation of banking and investment). If businesses in one industry can be prohibited from being banks, why not any other.
That is irrespective of my opinion on the topic (which incidentally is that "crypto currencies" are like a "guinea pig", which is neither a pig, nor comes from Guinea).
Privacy concerns... (Score:1)
This isn't about the common man... (Score:3)
You don't hear the common man up in arms about crypto-currencies. The big banks of the world see a serious threat to their system and are doing the best they can to fight it. The people that own the currency of the world, rule the world. The only people any of this legislation is meant to protect are the politicians and the bankers. JPMorgan, Chase, Deutsche Bank, etc., do not want to see their world cracked open the way every other major industry has, and certainly don't want to share a piece of the pie.
--
There is a gigantic difference between earning a great deal of money and being rich. - Marlene Dietrich
Re:This isn't about the common man... (Score:5, Interesting)
The people that own the currency of the world, rule the world
Very true. Which is why I am not all that keen to give that power to f-ing Facebook...
. more hot air from Washington . (Score:1)
Suppose a small country like Liechtenstein banned a local crypto currency. Would it matter?
Does the US think they are the center of the universe? They can ban jellybeans or propeller beanies or left handed robots and the world won't really care much. They can ban bitcoin and nobody will take notice. The US is not the center of the universe and what they do is not always earth shaking. They may be able to stop Facebook's Libra but a foreign company could do exactly that and the US would have no power to stop
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The US is not the center of the universe
Yes it is. You want to do business with the USA, you play by its rules. If you DON'T want to do business with the USA, it threatens to cut off anyone you do business with, directly or indirectly. Odds are, someone in your circle of associates will want to trade with the USA. So people will have to choose sides. You had better have a pretty compelling product to convince people to choose your way.
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Nothing compared to the EU govt. shakedowns of US tech companies.
Re:Flawed Headline (Score:4, Insightful)
Just because they don't pay their US taxes doesn't me we have to accept the same. You should be pissed off that your politicians aren't making them pay their fair share too.
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Red Alert, Facebook has a bank killer app (Score:2)
Libra is scaring the sh*t out of the banking industry and world leaders.
Facebook has the global power and backing to make Libra happen in a big bang launch and if they do it, get in early.
Zuckerberg better invest in more bodyguards now that tech is looking to eat the banking industry, which could very easily happen.
This is going to be very interesting.
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Is Libra even a crypto currency in the true fashon like Bitcoin? Or is it merely just a propitiatory stored value system, akin to a store giftcard? The whole point of a crypto currency is a distributed public ledger that is encrypted/signed by those doing the mining to keep said ledger trustworthy. When you have a central/single company controlling the "crypto currency" like facebook what is the point in even doing the crypto part of the currency, just keep a plain old ledger like any bank would, or how a s
Re: Red Alert, Facebook has a bank killer app (Score:2)
Re: Stupidity of People Being Up-voted is High (Score:1)
Dude, please lay off on the conspiratorial kool-aid.
If the US Government and the US Dollar were to collapse, as you seem to suggest should happen, the world economy as we know it is going to hell in a hand basket. Bitcoin, and other cryptocurrencies, aren't going to be the savior. Not even close.
I'll be stocking up on guns, bullets and food. That's way more useful to me than a silly blockchain ledger I probably can't access if shit hits the fan.
Worst Kind Of Lawmaking (Score:4, Interesting)
I don't particularly like facebook's Libra. I applaud the goals but I don't think it's a workable approach (in particular the real benefit of cryptocurrencies is the assurance that transactions are final and the ability to provide currencies without the overhead on Know Your Customer rules which facebook couldn't avoid). However, this is the worst kind of legislation where congress acts to protect an existing industry from competition based on some vague public disapproval of the company offering it.
Personally, I think the right approach is for congress to
1) Accept that cryptocurrencies exist and that it's far better to accept that there are currencies that are beyond the reach of KYC and anti-money laundering laws and simply regulate the transfers in and out of the currency (as is done now with bitcoin providers) and require that the transaction history in a 'cryptocurrency' (since Libra isn't really a crypto currency) be accessible to law enforcement as is the case with bitcoin.
There will always be ways to circumvent KYC laws and the like for criminals but the overhead imposed by the laws on remittances and the hurdles they create for large parts of the world to enter the modern economy aren't worth the benefits. Applying the laws just to the points of conversion plus the ability to analyze the transaction record is sufficient to identify terrorist funding and tax avoidance (the cost to do the data analysis is far less than the potential savings to the public).
2) Authorize narrow banking (the one possible domestic benefit of something like Libra) so people can choose to keep their money in bank accounts fully backed by deposits in the Federal reserve. It should be possible now but the Fed has been refusing access to banks that propose to offer these accounts.
De-centralized currency (Score:2)
And THAT is exactly why Bitcoin has something that FaceBookCoin doesn't. It's de-centralized. It's truly "democratic". It's "power to the people". There's nobody to fine $1,000,000/day (absurd! -- how much do we fine Jeff Epstein for what he did? How much do we fine Mitch McConnel for what he did? How much do we fine every corrupt politician? Hint - the sum of all that is zero.)
BitCoin changed things because truly [at the time] anybody could get into it, and mine it, and profit was to be had. Today
Corporate Cronyism at its best (Score:2)
Sound like pure corporate cronyism. Are the big banks worried about intruders in their protected space? Do the not want to share those huge, taxpayer-funded bailouts?
Even-handed regulation of financial markets - that is the government's responsibility. Deciding who gets to play? Not so much.
Re: (Score:2)
No corp should be allowed to create it's own currency, especially Facebook.
In game money (Score:2)
Wouldn't this outlaw creating gold/gems/rupees/doughnuts for games too? World of Warcraft would be a different place if you had to use real money to purchase items... but that would also mean that loot would consist of real money.
Where's the outrage? (Score:2)
Where's the huge backlash of outrage against FACEBOOK being involved in any way with currencies?
Or have all the people who GAVE A SHIT suddenly died?
Surely you're not suggesting that Facebook launching a currency would possibly be A Good Thing in any way at all?
Lets start with Failing The Laugh Test......
.....How does Libra help "the unbanked"? It's not like Facebook and friends are going to OPEN PHYSICAL TELL
You want woke? You can't handle the woke! (Score:2)
Overheard from the Floor debate: "First how many of you have Bitcoin investments and don't want the competition? 1, 2, 3, ...
"Second, how many of you have been informed of initial offering investment points in these? 1, 2, 3, ...
"Well, that answers our question!"
Re: (Score:1)
So... (Score:2)
Bipartisanship (Score:2)