One of the biggest stories in the financial world over the past month involves Facebook’s creation of a new cryptocurrency. The social media giant tried to keep the project a secret by giving it the code name Libra. However, a project of this size was impossible to keep under wraps. It was not long until word started to leak about Facebook having meetings with various financial institutions around the globe in an effort to get the financial backing they need to launch their new cryptocurrency. We now know that it will be called GlobalCoin. They decided to call it this because the new currency will give Facebook users the ability to send money easily around the world. They will be able to avoid many of the international fees that are charged by Western Union, Paypal and other companies.
There has been new info regarding Facebook’s Project Libra that was just released. Apparently, executives from Facebook have been meeting regularly with people who work for the U.S. Commodity and Futures Trading Commission (CFTC). The meetings were to allow the CFTC to determine if the Facebook GlobalCoin would need to be regulated by the agency. The talks were said to be in the very early stages. Facebook has not even submitted an application with the CFTC to begin trading their new cryptocurrency. Therefore, the CFTC cannot make any decisions one way or the other until an application is formally submitted.
Facebook employees have also held meetings in recent weeks with people who work for the governments of the United States and the United Kingdom. These meetings were to determine specific regulatory issues that Facebook will encounter once their new GlobalCoin is launched. It would appear that regulating Facebook’s cryptocurrency will be directly tied to whether or not it is backed by the U.S. dollar. It remains to be seen if that will be the case.
One of the issues that the CFTC is very concerned about is money laundering. That is because cryptocurrency is used by criminals around the world for that exact purpose. There are many regulations in place in the United States to prevent such illegal behavior. However, that is not the case in many other countries around the world. There are many ways that cryptocurrency can be used by criminals. Therefore, the CFTC needs to be sure that Facebook is doing everything it can to prevent this from happening.