Facebook Talks to CFTC About Globalcoin

Facebook is scoping out the regulatory ramifications for its cryptocurrency. CFTC chairman Christopher Giancarlo has told the Financial Times that the agency has had “very early stage conversations” with Facebook about Globalcoin, its stablecoin – a cryptocurrency that retains peg with a basket of goods. “We’re very interested in understanding it better,” he said, adding that Facebook had not yet applied for a regulatory permit. Preliminary reports stated that Facebook is planning to back up Globalcoin with dollar reserves raised from investors. This strategy might help it escape classification as a security token under CFTC laws.

An earlier BBC report stated that Facebook will launch its cryptocurrency next year. Facebook CEO Mark Zuckerberg has already had discussions with Bank of England governor Mark Carney to investigate “opportunities and risks” related to the coin. The stablecoin is part of a bigger venture – an e-commerce network – being planned for Facebook’s network.

Globalcoin will be the lynchpin for transferring value and payment between different stakeholders in the network. For example, users could earn Globalcoin by watching advertisements in Facebook and accumulate them to make purchases within its network. Whatsapp, Facebook’s messaging app targeted at developing countries, is also reported set to introduce a stablecoin to enable money transfer payments across borders.