CFTC Chairman: Facebook's Crypto Project Design Is 'Very Clever', But Only in Early Stages

Social media giant Facebook has been discussing the details regarding the development of its stablecoin  - GlobalCoin - with the U.S. Commodity and Futures Trading Commission (CFTC).

CFTC Chairman Christopher Giancarlo revealed that the US federal regulator has held “very early stages of conversations” with Facebook’s management. According to Giancarlo, the recent discussions with the social media giant have been centered around gaining a better understanding of what type of cryptoasset Facebook intends to release.

Does Facebook’s Stablecoin Fall Under CFTC’s Remit?

According to the Financial Times, the CFTC is looking to determine whether Facebook’s stablecoin would be considered a traditional financial instrument (and regulated as such) under the current regulatory framework.

Commenting on the matter, Giancarlo said the CFTC was “very interested” in gaining a better understanding of the new cryptocurrency and that the regulator would strictly “act on an application.” He also clarified that Facebook had not provided any details (in writing) to the CFTC regarding the upcoming launch of GlobalCoin.

Mainly Used For Cross-Border Transfers and Online Payments

Notably, Facebook’s management has also held discussions recently with other government agencies and officials in the U.S. and the U.K.. The conversations have reportedly been focused on the social media company’s plans to introduce GlobalCoin, a distributed ledger technology (DLT)-enabled stablecoin.

As confirmed by Facebook in previous reports, the firm’s new crypto token will mainly be used to make cross-border payments and settle e-commerce transactions. The social media giant’s cryptocurrency is also part of its blockchain-focused initiative, called Project Libra.

Facebook Reportedly Seeking $1 Billion in Investments for Crypto Project

While it’s too early to categorize Facebook’s GlobalCoin as a particular type of financial instrument that would be regulated by the CFTC, Giancarlo noted that if the social media giant’s stablecoin is backed by the USD, then it might not be necessary to tie the coin to derivatives.

Acknowledging that the overall design of Facebook’s latest stablecoin initiative is “very clever”, Giancarlo also mentioned in the report that the main compliance issues the project may face would be centered around whether there would be appropriate know-your-customer (KYC) / anti-money laundering (AML) checks.

In early April 2019, Nathaniel Popper, the author of Digital Gold, one of the most popular books on bitcoin (BTC), revealed that Facebook was planning to raise $1 billion for its cryptocurrency project. Popper, a New York Times reporter and Harvard University graduate, also noted in April that “one of the biggest allures of blockchain projects is the decentralization.”

Although Facebook might not need to conduct a fundraising campaign, as it has around $100 billion in total assets and $84 billion in equity, analysts have argued that the firm’s management may be planning to work with outside investors in order to make its crypto project look “more decentralized and less controlled” by the company itself.

New Wirex Visa Card Offers Users Cryptocurrency Rewards

A new Visa card launched by borderless payment platform Wirex rewards users with 1.5% back in bitcoin on all in-store purchases, allowing users to earn crypto rewards for using it.

According to a press release shared with CryptoGlobe, Wirex announced its new Visa Travelcard at the Singapore FinTech Festival. The card supports more than 150 currencies and processes cryptocurrency exchanges to fiat currency before transacting on the visa network.

It’s reportedly supported anywhere Visa is accepted and allows for free ATM withdrawals. Wirex touts its “first in the world” program allowing users to earn cashback in cryptocurrency. Per the firm the first 2,000 to order and activate a Wirex Travelcard will receive 20 Nano.

To get users onboard Wirex is removing management and traditional currency exchange fees for a limited period. The card is set to be available across the Asia-Pacific region. The firm’s CEO Pavel Matveev was quoted as saying it “witnessed an explosion in demand for hybrid fiat and crypto-enabled banking alternatives in APAC, where people need payments redesigned for the future.”

Wirex is one of the only cryptocurrency-related companies in the world to have been granted a UK FCA e-money license. Earlier this year it launched the WXT token on OK Jumpstart, OKEx’s IEO platform.

The firm’s announcement added it’ll soon release a “revolutionary selection of fiat-backed stablecoins.” Wirex is one of various fintech firms entering the crypto space. Revolut, for example, added stop orders for trading BTC, ETH, and BCH and others earlier this year.

Featured image by Nathan Dumlao on Unsplash.