Facebook (FB) shares traded lower Monday amid reports that Democratic lawmakers are planning legislation that would prevent tech companies from issuing digital currencies.
Reuters has reportedly seen draft documents from Democrats on the House Financial Services Committee, called the "Keep Big Tech Out Of Finance Act", that would propose rules to not only prevent Facebook and others from issuing digital currencies, but also from offering financial or banking products. The aim appears to echo concerns expressed last week by President Donald Trump, who said Facebook's planned digital coin, known as Libra, would have "little stand or dependability" and suggested the social media company might need to obtain a banking charter in order to move into offering financial services on its platform.
"A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System," the draft reads, according to Reuters reporting.
Facebook shares were marked 1% lower at the opening bell Monday to change hands at $202.85 each, a move that would still leave the stock some 54.4% higher than at the start of the year.
Bitcoin prices were also affected by the reports, with the cryptocurrency slumping more than 7% to to trade at $10,193.00 each on the Coindesk platform in early New York dealing after hitting a July 2 low of $9,855.00 early in the overnight session.
Facebook was also pressured by news of Democratic resistance to the pending approval of the U.S. Federal Trade Commission for a $5 billion settlement with the social media group over its handing of data linked to the Cambridge Analytica scandal.
The FTC's probe had centered around whether Facebook violated a 2012 consent decree mandating that the social network better protect users' personal information.
Democrat David Cicilline, who chairs as House antitrust panel, called the fine ""a Christmas present five months early" that "won't make them think twice about their responsibility to protect user data."
Facebook tallied $55.8 billion in annual revenues last year, and has already set aside $3 billion for the expected penalty, which gives it more than enough room to absorb what is still likely to be the biggest fine ever paid by a public company to the FTC.