The Banking System of Big Tech's Dreams Is Dangerous
Not satisfied by having hordes of your data, and selling it for profit, big tech has entered into two very profitable but controversial fields that will have huge impacts on the way we see the internet, payment systems, AI and wars. This is part one of a two-part series looking into those ambitions.
The recent One Big, Beautiful Bill by US President Donald Trump has two major changes that have found a lot of favour among the tech billionaires.
1. For the next 10 years, no US state will have the authority to regulate Artificial Intelligence. As AI continues to evolve rapidly – to the extent that it's unclear what direction it's heading in – there will be no checks or oversight.
2. Unrestricted surveillance has been greenlit. The bill covertly agrees to AI-enabled surveillance. Towers will be deployed, along with drone systems and integrated communication backbones.
Yet the bill doesn’t satisfy the ambitions of tech billionaires. What they really want is the GENIUS Bill, short for Guiding and Establishing National Innovation for US Stablecoins Act.
To understand what this means, you need to first understand stablecoins. A stablecoin is a type of virtual currency whose value is tied to another currency – like one stablecoin can be equal to $1. Its value doesn’t fluctuate wildly like other cryptocurrencies, hence the name "stablecoin".
The key difference between stablecoins and cryptocurrencies like Bitcoin is that Bitcoin has its own independent value that’s not pegged to any fiat currency and fluctuates based on market conditions.
Now, the US government is on the verge of passing legislation to formally recognise and support stablecoins. The tech industry has obviously enthusiastically welcomed this move. In fact, companies like Apple, Google, Meta, Uber and X are already testing their own versions of stablecoins. Even Trump’s family has founded a company called World Liberty Financial, which is ready to sell its virtual currency USD1.
It’s reported that the stablecoin market is already worth over $250 billion. The fate of the GENIUS Bill and stablecoins will be decided on June 17, when the US senate will vote on it before passing it on to the House of Representatives.
In simple words, what many in the US fear is that stablecoins will open doors for several kinds of corrupt deals including with foreign governments that would go untraced. Concerns are also raised on the Trump family’s direct involvement and launch of their own virtual currency.
The second major concern is weakened consumer protection laws. The Bill weakens the authority of the Consumer Financial Protection Bureau (CFPB), the federal regulator responsible for ensuring that financial and tech companies don't exploit consumers. Interestingly, the CFPB was already investigating Meta and other tech firms’ payment systems, but under the new Bill, its powers will be significantly curtailed.
Tech companies are already enjoying the benefits of employing their own payment systems. We are by now flooded with different payment systems – Apple Pay, Google Pay, Amazon Pay, Whatsapp Payments along with payment/credit systems used by retailers such as Myntra, Flipkart etc. The market size of digital wallets is continuously on the rise; currently about 50% of all payments in the US are through one of these digital wallets. The tech firms make millions by charging transaction fees, for a simple API that can be easily embedded in most e-commerce set-ups. and often these give them a competitive edge over others. In simple words, they have more data on you – not just your shopping/spending habits, but your financial preferences.
But owning a virtual currency is a dream scenario. Digital and creator economies are booming, yet cross-border payments still remain a bit of a challenge. A virtual currency would solve that. For instance, Facebook or Twitter would be directly able to pay their ‘creators’ in their own currency, without the hassle of conversion or going back and forth with traditional banking systems.
So, brace yourself, because soon, you’ll find yourself paying with Musk-bucks or Jeff-coins! And with these, these tech giants could force users to transact only within their ecosystems, locking you into their currency.
You’ve already seen a sample of this with the digital payment wallets. You know your money in Amazon Pay, Ola money or Paytm is not a bank deposit. These are not traditional banking systems, and they don’t offer you any interest. Money can only flow into these and cannot come out; for example, Myntra credits can only be used on Myntra, and Ola Money only works for Ola rides.
Take BluSmart, an EV taxi service, as a cautionary tale. It recently suspended operations without warning. Thousands of users who had money stored in BluSmart’s wallet suddenly found it useless and inaccessible.
You might think, ‘It’s just Rs 500 sitting there.’ But when millions of people around the world have just Rs 500 or a few dollars locked into these systems, it adds up to billions of dollars sitting in the hands of tech companies, earning them interest – while giving you none.
With their own coins and currencies, companies like Google and Meta could effectively become private banks, without the responsibility of paying you interest or adhering to banking regulations.
Experts warn that this could lead to a fragile, unregulated shadow banking system, parallel to the existing one. And if these private financial empires become “too big to fail”, governments might be forced to bail them out using public funds.
Tech bros are already behaving like unelected shareholders of the government. Now, by creating their own currencies and financial systems, they’re aiming to become an integral part of the global economic structure –without public accountability.
Instead of tightening regulations to protect ordinary people, the US government seems to be actively dismantling the rules, potentially putting the public at risk. What this means for the rest of the world is that if the US is not regulating these tech giants, the global south would be forced to follow suit. The tech giants will run their barely-regulated currencies, while our financial systems and public money will suffer.
Part 2 of this article will focus on the AI ambitions of techbros, on display in the recent military conflicts in the world.
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