It is a well-known fact now that Facebook is preparing to launch its own cryptocurrency in the market very soon. The company has been busy in the preparation and consulting a large number of stakeholders which could impact the future of its stablecoin. Right from holding a series of discussions with payment platforms to reaching out to various federal and regulatory agencies, Facebook is leaving no stone unturned to make sure that the launch of its cryptocurrency will become instantly hit among its users without embroiling in any kind of unnecessary controversy.
Facebook and CFTC
To achieve this, the California-based social media giant has now started a series of conversations with the Commodity and Futures Trading Commission (CFTC) of the US. These discussions have been started to understand whether the company’s stablecoin will fall under the jurisdiction of CFTC. This is done to get clarity about the regulatory framework and how Facebook is going to address any kind of statutory concerns of the federal agency.
That said, discussions are in a very early stage, and it will be difficult to comment as of now in which directions the deliberations will be heading in the future. Even the chairman of CFTC, Christopher Giancarlo, said that discussions have just been started and this exercise is more towards knowing whether the cryptocurrency that Facebook will be launching comes under the jurisdiction of CFTC. The chairman further reiterated that the agency is looking into the matter and deliberating to understand the whole development in a better manner. There is no formal application raised by Facebook in front of CFTC, and hence, there won’t be a formal judgment or decision that the agency is going to take in this regard.
The news has come in the backdrop of recent reports that state Facebook’s attempt to reach out to the legislators in both the UK and US as the company is looking forward to having an opportunity of interaction with a variety of stakeholders including government agencies and legislators. This is being done to understand the kinds of statutory concerns government organizations could have regarding its stablecoin. So that you know, Facebook’s cryptocurrency project which is codenamed “Project Libra” is going to manifest in terms of launch of a stablecoin which allows its users to send/ receive payments across the borders in addition to making online purchases. The company is developing a whole payment ecosystem which will help users to adopt its stablecoin and use it for a variety of purposes.
Experts in the crypto industry are watching this development very keenly. If Facebook chooses to tie its stablecoin to the US dollar, then probably it might not need to have to the compulsion of a derivative pegged to it. That will be an added advantage for the company but still as a regulator CFTC could very well ask Facebook to follow its instructions and safeguards to curb money laundering practices. Facebook is also expected to be instructed to follow some of the basic practices like Know Your Customer (KYC) once it launches its stablecoin.