House Democrats seek to bar tech firms from operating like banks

WASHINGTON — House Democrats are floating legislation aimed at restricting big tech companies from participating in the financial system ahead of hearings this week about Facebook’s proposed Libra cryptocurrency.

The draft legislation, released by House Financial Services Committee Chairwoman Maxine Waters, D-Calif., would prohibit large technology firms with more than $25 billion in annual global revenue from establishing and operating a digital asset that is intended to be used as a “medium of exchange, unit of account, store of value, or any other similar function."

If enacted, the bill would result in a fine of up to $1 million a day for any tech company operating a financial service that is banned by the legislation.

The legislation comes as David Marcus, head of Facebook’s proposed Calibra digital wallet, is scheduled to testify to the Senate and House about Libra, which the social media giant says it plans to launch by 2020.

When Facebook first announced its plans to launch a cryptocurrency by 2020, Waters called for a moratorium on Libra until Congress looked into the matter.

Federal Reserve Chairman Jerome Powell and other lawmakers also cast doubt last week on Facebook's ability to address various issues in time for the proposed launch date as officials consider how to regulate the proposed digital currency.