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Facebook in discussions with CFTC about GlobalCoin

Facebook has entered into discussions with the U.S. Commodity and Futures Trading Commission (CFTC) about its forthcoming crypto stablecoin project.

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Social media giant, Facebook has entered into discussions with the U.S. Commodity and Futures Trading Commission (CFTC) about its forthcoming crypto stablecoin project.

As per a report released by the Financial Times on Sunday 2 May, the CFTC chairman Christopher Giancarlo stated that the agency has been a part of “very early stages of conversations” with Facebook. The end goal of these discussions is to better determine whether Facebook’s stablecoin could possibly fall under the CFTC’s regulatory remit.

Giancarlo was quoted stating:

“We’re very interested in understanding it better. We can only act on an application, we don’t have anything in front of us.”

This news comes hot on the heels of reports that Facebook has been in talks with government officials in the U.S and U.K to discuss use cases and regulatory issues surrounding GlobalCoin, its forthcoming crypto stablecoin.

GlobalCoin, which falls under Facebook’s Project Libra, is reportedly aimed at allowing Facebook’s global community to transfer funds across borders as well as make online purchases.

Giancarlo further added that it’s too early to say whether GlobalCoin could fall under CFTC’s remit, but stated that the if crypto could be backed by the USD, then there would be far less of a need for derivatives tied to it.

Giancarlo stated “That’s very clever,” on the design of the stablecoin.  However, it must be noted that the core compliance issue faced by regulators and in this case Facebook, is whether the social network will comply and implement the necessary anti-money laundering and know-your-customer (KYC) measures.