Facebook has reportedly begun discussions with regulators in the US over possible regulatory issues. The development takes place ahead of its planned rollout of a new on-platform cryptocurrency known as GlobalCoin.
Facebook and the US Commodity and Futures Trading Commission are currently in consultation. They are exploring whether and to what degree the stablecoin might be subject to the remit of the regulator.
As reported in the Financial Times, CFTC chairman Christopher Giancarlo described the meetings as “very early stages of conversations”. This suggests the regulator was still trying to get to grips with how the stablecoin might work.
“We’re very interested in understanding it better…We can only act on an application, we don’t have anything in front of us.”
Facebook is in active discussions with a number of regulators worldwide ahead of its crypto stablecoin launch. This includes regulators in the US and the UK.
The cryptocurrency has been developed under the banner of ‘Project Libra’. It has also been the subject of much cryptocurrency speculation since plans were first disclosed. According to what little is known about the stablecoin, Facebook plans to use it as a way to allow users to transfer money internationally, without the same fees and processing times. Also facillitated will be purchases on the Facebook platform and elsewhere.
Giancarlo said that if the cryptocurrency was pegged to and backed by USD, there may be less of a need for derivatives which could minimise the CFTC’s oversight of the project. However, he conceded that it was still too early stage to say what role the regulator may have in overseeing the development.
He went on to say there were still concerns over how Facebook could implement know-your-customer and anti-money laundering processes in connection with the use of its cryptocurrency.
While noted as being early stage, the talks are the latest step forward from Facebook towards launching its long-awaited cryptocurrency.
Expectations are high within the industry ahead of the rollout, which could see the network’s 2 billion users accessing cryptocurrency on platform. The vast majority of whom will be doing so for the very first time on Facebook.