Facebook will launch its cryptocurrency soon and wants to meet regulatory compliance for what will likely be one of the most widely distributed digital currency when it goes live.
According to a Financial Times report on Sunday, United States Commodity and Futures Trading Commission (CFTC) Chairman Christopher Giancarlo confirmed that his agency has held “very early stages of conversations” with Facebook regarding their proposed cryptocurrency.
The latest revelation follows an earlier report that the U.S Senate Banking Committee contacted Facebook with a letter asking for more information regarding the cryptocurrency they want to launch.
The meeting with the CFTC, however, had a different tone with the report revealing that the regulator’s discussion with Facebook centered on whether the proposed cryptocurrency would come under the CFTC’s oversight.
Based on what is known so far about the Facebook-backed cryptocurrency reportedly called GlobalCoin, Chairman Giancarlo said that the CFTC is interested in “understanding it better,” and may not be the right regulatory agency for the coin.
The reason for the unlikelihood of the CFTC regulating the cryptocurrency according to the top official is the fact that Facebook could peg the coin to the U.S Dollar as we revealed in earlier reports.
Since the coin would have a value that does not fluctuate in the same manner as Bitcoin and other cryptocurrencies, there will likely be no need for a derivative product, which is the main sector that the U.S CFTC exercises its regulatory oversight.
For the interim, Chairman Christopher Giancarlo noted that Facebook did not submit an application to the CFTC regarding the cryptocurrency.
“We can only act on an application, we don’t have anything in front of us,” he said in the report.
Facebook’s quest to launch a cryptocurrency first came under public radar late last year with some critics even suggesting that it could endanger Bitcoin’s future. However, it appears the cryptocurrency would have a lot of regulatory compliance issues to deal with before getting a chance to make its debut in the crypto market.