The emerging financial technology (“FinTech”) industry has been expecting some new U.S. legislation that might tilt the market in their favor, however, with privacy concerns looming, FinTech is collectively
holding its breath.
In mid-2019, Facebook announced a planned cryptocurrency, Libra (a new “stablecoin” a subset of cryptocurrency), which changed the FinTech industry’s focus from pressing hard for beneficial bills to steering away from measures aimed at regulating Facebook’s aggressive commerce plans, and some different proposals have been circulated. But in 2020, most Fintech legislative observers expect and hope for status quo, although some federal privacy legislation may happen.
Proposals like a bill from Rep. Sylvia R. Garcia, D-Texas, that would have regulated Libra as securities were only modestly amended, a positive sign for the FinTech community.
But industry pundits expect to see more measures aimed at discouraging Big Tech from moving onto Wall Street’s turf than those doing the opposite. Some proposals with names like the “Keep Big Tech Out of Financial Services Act,” have circulated.
Jonah Crane, a former Treasury Department staffer who now advises fintech firms stated, “I don’t see high odds that those kind of bills will go anywhere, but they are the kind of bills that, if they start to get momentum, could be hard to stop because of the general antipathy towards Big Tech these days.” But even if bills like that make it to the House floor, they would likely stall in the Senate. “Betting on congressional inaction has sort of been a relatively safe bet for a while,” said Crane. “But there are a handful of small things that seem like they could happen.”
The fear that Big Tech companies like Google Alphabet and Facebook will venture into banking is largely motivated by the sector’s spotty record with data privacy. Congress—and the public—has increasingly
become more concerned that Silicon Valley is violating users’ privacy rights, by tracking users’ every online move, and then leveraging that data to manipulate users’ online use, buying decisions, and even political stances (remember Cambridge Analytica?).