J. Christopher Giancarlo, the Chairman of the U.S. Commodity Futures Trading Commission, announced the start of consultations with Facebook Inc. on the launch of the Libra Cryptocurrency Project. On May 2, the company has registered Libra Networks in Switzerland, which will be engaged in the development of GlobalCoin stablecoin.
Two commissions regulate cryptocurrency circulation in the USA: SEC and CFTC. In this respect, J. Christopher Giancarlo’s agency is more loyal to new cryptocurrency projects, so that investors can actively trade in bitcoin futures on trading floors. At the same time, the Securities and Exchange Commission (SEC) takes a more conservative approach. It still has not approved any application for the start of Bitcoin ETF.
Regardless of the fact that SEC and CFTC are engaged in controlling the financial markets, it is the Securities and Exchange Commission that is considered to be the main controlling body of the country.
At present, Facebook Inc. is trying to find out who exactly will regulate the activities of Libra Networks. Its quick approval in the USA will allow running it with the least obstacles. The meeting with CFTC representatives should have clarified which agency could give permission to launch the project. However, J. Christopher Giancarlo reported that his agency has not yet been able to answer this question, and asked Facebook for additional information.
Facebook is not limited only to the local US market; it is preparing to launch the Libra payment system with GlobalCoin stablecoin simultaneously around the whole world. In this regard, it needs to coordinate its activities with a number of partners. That is why Libra Networks received registration in Geneva.
In addition to the meeting with CFTC representatives, consultations were held with the U.S. Department of the Treasury, the Bank of England, as well as the representatives of Western Union, Visa and MasterCard payment systems.
The past experience shows that the European Commission also can spring a mine on somebody while ignoring its interests. It fined Google a record EUR 4.34 billion in June 2018 together with EUR 1.49 billion in March 2019 for violations in advertising. For this reason, it is quite obvious for Facebook to solve possible problems in advance.
According to estimates, Facebook will launch its own GlobalCoin stablecoin in early 2020. This coin will be linked to a currency basket which includes US dollar, euro and Japanese yen. That is, an asset with a high level of diversification and reliability will be available to users. Moreover, it is expected that it will be available immediately in Facebook Messenger, WhatsApp and Instagram.
David Marcus, the Head of the Project, is a member of the Board of Directors of Coinbase exchange, and the Head of PayPal in days past.
Mark Zuckerberg, the Corporate Head, is completely convinced that transferring money will be as easy as sending a photo. Anyway, minor details of Libra Networks development are still unknown. Nevertheless, some experts are quite sure that project implementation can significantly change financial mechanisms in the world. Presently, Facebook global audience is 1.49 billion people.