Facebook Inc will face unprecedented regulatory scrutiny over a new digital curr...
) will face unprecedented regulatory scrutiny over a new digital currency that the social media company hopes will become globally recognized legal tender within a year.
Randal Quarles, chair of the Financial Stability Board, which coordinates financial rules for G20 countries, warned this week that wider use of crypto-assets for retail payments needs close global scrutiny by regulators. Cryptocurrencies such as bitcoin remain one of the least-regulated areas of finance.
It has also applied for the license required to operate a cryptocurrency business in New York from the state’s Department of Financial Services, a person familiar with the matter said. Representatives of Britain’s Financial Conduct Authority, the Bank of England, and Switzerland’s financial regulator FINMA have also said Facebook has been in touch.
They plan to launch the whole system in the first half of 2020, and intend to eventually offer a broad suite of financial services, including loans. “Just in terms of new regulators, it’s a whole new ball game,” said Jeff Bandman, a former U.S. Commodities Futures Trading Commission official who now runs the fintech regulatory consultancy Bandman Advisors. “A year is enough time to meet with regulators, figure out where the real trouble spots are and potentially scale it back to something narrower.”
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