Amid a series of hearings on cryptocurrency scheduled this week in the House of Representatives and Senate, a discussion draft of a bill entitled the “Keep Big Tech Out of Finance Act” has begun to circulate online. The bill appears intended to prohibit several large, well-known technology firms from engaging in various cryptocurrency-related businesses in the United States.
The bill begins by defining “large platform utility” as any technology company (A) with an annual global revenue of $25 billion or more; and (B) that is predominately engaged in the business of offering to the public an online marketplace, an exchange or a platform for connecting third parties. The bill then lays out two broad prohibitions for large platform utilities.
First, a large platform utility may not be, and may not be affiliated with any person that is, a “financial institution,” which is in turn defined to include a wide range of banking institutions, credit unions, national securities exchanges, securities and commodities firms, money service businesses and other similar financial entities. Second, a large platform utility may not establish, maintain or operate a “digital asset” that is intended to be widely used as a medium of exchange, unit of account, store of value or any other similar function, as defined by the Federal Reserve. The term ‘‘digital asset’’ means an asset that is issued and transferred using distributed ledger or blockchain technology, including “so-called” virtual currencies, coins and tokens.
The bill lays out an elaborate mechanism by which noncomplying large platform utilities must divest from nonconforming businesses within one year. Thereafter, the bill establishes fines for noncompliance of up to $1 million per day.
Like all discussion drafts of bills, it is difficult to predict the prospects of enactment for the “Keep Big Tech Out of Finance Act.” Nevertheless, there appears to be growing bipartisan support in Congress for measures of this kind, which would suggest a new series of challenges for cryptocurrency businesses of all sizes.