- Facebook is currently talking with the CFTC and other regulatory agencies
- The goal is to be compliant with the current regulatory framework
Facebook seems to be discussing with the U.S. Commodity and Futures Trading Commission (SFTC) about the blockchain and crypto initiative that the social media platform started. The information was released by the Financial Times in a recent report.
Facebook and CFTC Discuss GlobalCoin’s Influence
As per the report, CFTC chairman Christopher Giancarlo, explained that the agency has been talking with Facebook regarding the future project and virtual currency GlobalCoin. The main intention is to understand whether the digital currency is able to operate under the CFTC and its regulatory oversight.
Mr. Giancarlo commented about it:
“We’re very interested in understanding it better. We can only act on an application, we don’t have anything in front of us.”
According to some reports, Facebook has been in talks with other governments in the United States and the United Kingdom. The goal is to be compliant with the regulations imposed by these countries. Facebook wants to build a virtual currency called GlobalCoin that could be used by users to make purchases in different shops and other places. It would also be possible to make peer-to-peer transactions as well.
The digital currency is expected to be a stablecoin that will not have a fluctuating price and that will be stable compared to other virtual currencies in the market. Apparently, Facebook is going to be backing it with cash reserves.
The project that Facebook is working on is called “Project Libra” and it aims at helping users perform online and digital purchases around the world. In the beginning, reports suggested that the social media platform wanted to create a stablecoin to perform cross-border transactions and help Indian WhatsApp users.
Facebook owns Instagram and WhatsApp as well, increasing the reach that the company has over large numbers of individuals around the world.
According to the report released by the Financial Times, Giancarlo explained that if the cryptocurrency created by Facebook is backed by the U.S. dollar, then there might be less of a need for derivatives tied to it. Moreover, Facebook is clearly going to be implementing Anti-Money Laundering and Know Your Customer measures to be sure that regulators allow it to be used.