By CCN.com: Facebook’s plans to launch the GlobalCoin cryptocurrency are moving full-steam ahead. According to the Financial Times, the social media giant has already initiated talks with the Commodity Futures Trading Commission (CFTC).
The outgoing chairman of the CFTC, Chris Giancarlo, told the publication that the derivatives regulator and Facebook were in the ‘very early stages of conversations’. Per Giancarlo, this is with a view of understanding whether Global Coin falls under the regulatory purview of the CFTC. However, Facebook has yet to submit a formal application to the body:
We’re very interested in understanding it better. We can only act on an application, we don’t have anything in front of us.
The CFTC head further said that it is currently too early to determine whether GlobalCoin would be limited to cash-based markets. If so, Facebook’s coin would not fall under the regulatory purview of the CFTC. This would be in contrast to Bitcoin whose trading is mostly done via futures.
Reports of Facebook launching GlobalCoin next year emerged nearly a fortnight ago.
It is understood that initially, Facebook intends will test its cryptocurrency in a dozen countries. As has been previously reported, GlobalCoin will be pegged to the U.S. dollar. It will be used to offer a way of making digital payments in its ecosystem. This could extend beyond the main Facebook social network to the tech giant’s other properties such as WhatsApp and Instagram.
Besides the CFTC, Facebook’s CEO Mark Zuckerberg has also met with the governor of the Bank of England, Mark Carney. The two reportedly discussed the risks and opportunities that come with unveiling a cryptocurrency.
Per the BBC, Facebook has also consulted with U.S. Treasury officials regarding operational and regulatory issues.
With Facebook’s digital currency billed as a peer-to-peer digital payments solution, it is impossible not to look back at the social media giant’s track record in this niche. Four years ago Facebook unveiled payments services in the U.S. via its Messenger app.
This was in following a path laid out by China’s social network WeChat. The chat app currently boasts of 600 million users leveraging it for payments.
Messenger’s success as a payments platform has however not been as successful as WeChat. Two years after the service was launched in Europe, it is now being discontinued after failing to take off as had been hoped. It will be interesting to see whether GlobalCoin will succeed where the Messenger payments service failed.
Last modified: July 13, 2020 1:35 PM UTC