Facebook Consulting US CFTC Regarding GlobalCoin Cryptocurrency Launch
In another step toward launching its own digital asset, Facebook went through a consultation with the CFTC, to determine the regulatory scope of the digital asset.
The Commodities Futures Trading Commission (CFTC) has started early-stage talks with Facebook, reported Reuters. The talks need to determine whether the digital asset proposed by Facebook falls under the expertise of the CFTC.
The CFTC became famous in cryptocurrency circles for the position of its chairman, J. Christopher Giancarlo, who spoke in favor of using Bitcoin and other digital assets. Giancarlo, however, has been cautious and conservative about fast and widespread adoption.
“We’re very interested in understanding it better,” Giancarlo said, cited by a recent Financial Times report. “We can only act on an application, we don’t have anything in front of us.”
Reportedly, Facebook intends on launching an asset called GlobalCoin, to be used within WhatsApp and other related social media activities. The coin will most probably be pegged to the US dollar.
The CFTC oversees Bitcoin futures, and it is unclear whether the Facebook stablecoin would fall under the rules of derivatives and futures trading. The issuance of stablecoins is still a regulatory wild west, as digital assets are being tested for security status, and are facing attempts at restriction based on anti-terrorism user transparency laws.
Currently, the US Securities and Exchange Commission is exploring digital asset projects, to check for the sale of unregistered securities. The SEC has put a hamper on the activity of Kik, a social media company that is facing troubles with its KIN digital asset.
Additionally, the US Treasury’s Financial Stability Oversight Council is exploring the role of digital coins and tokens in money laundering, and whether using those assets is breaking know-your-customer and anti-terrorism laws.
Currently, there is only limited, grass-roots usage of a handful of digital assets for social media. Assets like Dogecoin (DOGE) have been used in Reddit tipping in past years, and projects like ReddCoin (RDD) were dubbed the “coin for social media”. Other assets like STEEM were created with social media in mind. However, few mainstream companies are only cautiously exploring the idea of digital coins.
Bitcoin (BTC) has been deemed unsuitable for social media, though an attempt has been made with the Tippin app, available through browsers to be used on Twitter.