Some weeks back, Facebook indicated that it was launching a cryptocurrency payment service called Project Libra. The company has had a series of talks with various e-commerce companies as well as financial firms seeking support for the payment service. The latest discussions involve the US Commodity and Futures Trading Commission regarding Facebook’s stable coin initiative: GlobalCoin.
CFTC Indicates Interest
The Financial Times reported on Sunday that Christopher Giancarlo, the chairman of CFTC, had confirmed that talks regarding the support for the stablecoin were in early stages. He added that the goal of the discussions is to confirm if the cryptocurrency will fall under the regulatory remit of CFTC. The chairman said that CFTC was interested in understanding the stablecoin better and that action could only be taken when there is an application. For now, however, no application has been made for GlobalCoin.
This news comes after the company was in discussions with US and UK government officials regarding the regulatory concerns and opportunities of Facebook’s GlobalCoin. Project Libra’s objective is to permit Facebook users across the world to transfer money.
Too Early to Tell
Since the CFTC and Facebook are still in discussions as CFTC tries to understand the coin, the chairman indicated that it was still early to ascertain the possibility of GlobalCoin falling under the CFTC remit. However, Giancarlo indicated that if the stablecoin will get backing of the US dollar, then the possibility of it being tied to derivatives will be minimal. He further indicated that the main compliance issue by regulators will be how the company will implement and adhere to anti-money laundering and KYC measures.
Some people believe that Facebook’s GlobalCoin will be a game changer in the crypto industry, while some hold that it is such an expensive feat that won’t go far.
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