Facebook in talks with US regulator over digital currency

Facebook in talks with US regulator over digital currency

Crypto currencies have actually been around for 10 years now. However, the right formula of new technology, stability, liquidity and regulatory security is still evolving. Facebook has been working a digital currency for well over a year so must now be getting close to that formula. The real market is actually to use such digital currencies as a means of money transfer, as opposed to yet another crypto-currency for speculation. Given the high cost of services such as Wester Union, this market is ripe for disruption. Current alternative providers do not have the financial muscle or reputation to challenge the traditional money transfer businesses.

If Facebook can get the regulatory approvals and peg its digital currency to the US$, the main issue that will remain will be protection against money laundering. Digital currencies, despite their poor reputation, can actually provide better anti-moneylaundering protection than fiat currencies. Blockchain technology provides fool-proof end to end full audit-trail. As long as the identity is correctly captured at the start of the transaction, there should be full transparency of each party who handles it so regulatory approvals should not be a concern.

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Ayaz Siddiqui, 3rd June 2019

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