Regulation

Lawmakers Eye Increased Libra Oversight

Capitol Hill

Facebook’s planned cryptocurrency Libra may see increased regulatory oversight, at least if new legislation introduced in the U.S. Congress comes to pass.

As reported by The Hill, Reps. Sylvia Garcia, Democrat of Texas, and Lance Gooden, Republican of Texas, introduced a bill that would put the would-be crypto under the oversight of the Securities and Exchange Commission (SEC). The move, according to the publication, would subject the digital coin to “a set of extensive and well established regulations.”

“Managed stablecoins, such as the proposed Libra, are clearly securities under existing law,” Garcia said in a statement last week. “This legislation simply clarifies the statute to remove any ambiguity. Bringing clarity to the regulatory structure of these digital assets protects consumers and ensures proper government oversight going forward.”

As has been widely reported, the 21-member consortium backing Libra (which includes Facebook) has said it supports “responsible financial services innovation and oversight,” as noted in a statement by Libra Association Head of Policy and Communications Dante Disparte. “We recognize that stablecoins are an emerging technology, and that policymakers must carefully consider how this fits into their financial system policies. However, we believe that it is important to regulate activities and not technologies, allowing for responsible innovation to flourish.”

Apple Gets a Look Too

Separately, but also in the halls of Congress, a number of representatives from the House Judiciary antitrust subcommittee are looking at the tracking features of tech giant Apple’s iOS 13. As detailed by The Washington Post, the members are looking into whether the tracking technology, which in turn restricts third-party access, is tied to anticompetitive behavior. The iOS 13 removes the ability for third-party apps to request device location upon the device setup.

“I’m increasingly concerned about the use of privacy as a shield for anti-competitive conduct,” said Rep. David Cicilline, Democrat of Rhode Island and chairman of the House Judiciary antitrust subcommittee, in a statement. “There is a growing risk that without a strong privacy law in the United States, platforms will exploit their role as de facto private regulators by placing a thumb on the scale in their own favor.”

In the Senate, and as reported by The Hill, Senate Democrats have brought forth an online privacy bill.

The bill was introduced by Sen. Maria Cantwell, Democrat of Washington state, and is titled the Consumer Online Privacy Rights Act. The bill would mandate that users have the right to see and delete personal information that firms collect. If the companies fail to honor those requests, they would be liable for fines. The Federal Trade Commission (FTC) would also have more leeway to pursue those violations.

Citigroup Fined

Beyond the United States, news came last week that the Prudential Regulation Authority (PRA), the supervisory arm of the Bank of England (BoE), has fined Citigroup a record-breaking $56.3 million.

The fine comes after Citi was cited for not completing accurate returns between 2014 and 2018, according to a report by Reuters.

“While Citi remained in surplus to its liquidity and capital requirements at all times, the failings persisted over a significant length of time and were serious and widespread in nature,” BoE said.

The bank added that the returns did not provide a reliable picture of how much capital Citigroup had, or the amount of liquidity on hand.

“Citi failed to deliver accurate returns and failed to meet the standards of governance and oversight of regulatory reporting, which we expect of a systemically important bank,” said BoE Deputy Governor and PRA Chief Executive Sam Woods. Citigroup, for its part, said it corrected the issues as soon as it became aware of them.

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