Heath Tarbert, chairman of the U.S. Commodity Futures Trading Commission (CFTC), says it is not yet clear what sort of product Libra will be – including whether it might be a security.
Speaking to CNBC at the sidelines of the CME Group Global Financial Leadership conference Tuesday, Tarbert addressed the current U.S. regulatory stance on cryptocurrencies and blockchain, and the nation’s global position regarding the technology.
While CNBC originally stated that Tarbert claimed “Facebook’s Libra is a security,” the headline was changed after publication. Rather, Tarbert only contrasted bitcoin, which the CFTC has classified as a commodity, with Libra in terms of its current stage of development.
Bitcoin has been around for 10 years, is well understood, and the CFTC is “able to classify that not as a security but as a commodity,” he said. Libra, on the other hand, is a “fundamentally different product,” but currently in a state of flux.
“Libra is developing and there are a bunch of unanswered questions – and also the way that it’s structured, linking it directly to a set of national currencies – a very different product,” he said.
Former CFTC chair Gary Gensler has previously argued that Libra should indeed be regulated as a security.
Still, a CFTC decision over Libra’s status will likely have to wait until the stablecoin – which is expected by the Libra Association to be pegged to the U.S. dollar, euro, the yen, the U.K. pound and the Singapore dollar – is launched. That’s slated for mid or late next year, if the project can get over the considerable regulatory pushback it’s seen so far.
Highlighting that it’s still too early to classify the digital currency when it’s still in the works, Libra co-creator David Marcus has also said that it may ultimately be split into separate stablecoins each pegged to a different fiat currency.
Elsewhere in the interview, Tarbert addressed the perception that the U.S. is not seen as the global leader when it comes to blockchain regulation.
“I don’t think we’re at the top of the list; we may not be at the bottom. I think the Libra association is a good example of this,” he said. “They could have chosen any place in the world to set up. They chose Switzerland. My understanding is a second choice was Singapore.”
However, Tarbert said he is working to ensure the U.S. is a leader since the costs are potentially high should the nation fall behind others.
“I think whoever ends up leading in this technology will end up writing the rules of the road for the rest of the world,” he said.