The world’s largest social network company, Facebook, has begun talks with the US Commodity Futures Trading Commission (CFTC) regarding its secretive cryptocurrency project, The Financial Times has reported.
In a report published on Sunday, the newspaper cited the head of the derivatives regulator, Christopher Giancarlo, who said that the commission was in “very early stages of conversations” with the Menlo Park-based tech giant to understand whether the company’s rumoured stablecoin project “GlobalCoin” would fall under the CFTC’s auspices.
“We’re very interested in understanding it better,” Giancarlo said, as quoted by the FT. “We can only act on an application, we don’t have anything in front of us.”
A good example of applications falling under the CFTC’s scope would be any potential derivatives tied to GlobalCoin. However, since Facebook’s cryptocurrency will be pegged to a fiat currency like the US dollar, currency futures might reduce the need for derivatives tied to the stablecoin. According to Giancarlo, this is a “very clever” design.
Earlier reports have suggested that Facebook might peg the stablecoin to a basket of fiat currencies, instead of a single one. The company has been reportedly looking to raise up to $1 billion from outside investors and plans to use the capital as collateral.
Other reports have said that in recent weeks Facebook has also had conversations with other regulators regarding the project, including the US Treasury, as well as with the governor of the Bank of England Mark Carney. The FT report said that both the US Treasury and the BoE had declined to comment on the matter.
GlobalCoin is reportedly part of Facebook’s strategy to tap into the online money transfer market. The earliest reports on the matter suggested that the token would be used in Facebook’s mobile messaging service WhatsApp and would be initially targeting the Indian market.
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