The important thing to recognize is that Facebook's "currency" raises all the classic bank-regulatory questions, starting with the Bank Holding Company Act: a non-bank company would be prohibited from owning a bank for good, pro-market reasons recognized in 1956. It would not take much tweaking of the definition of "bank" (if any) to see that Facebook would be in violation of the BHCA. Beyond that, there are the classic bank-regulatory issues going back to 1933 (and bank currency-regulatory issues going back to the 1860's banking act): Facebook (or its vehicle) would be taking massive deposits from the public. How those deposits are managed would constitute a huge risk for individuals' finances and on the (global?) economy: classic bank regulations on capital and liquidity should apply; even if Facebook claims it will have 1:1 hard-currency backing, that needs to be supervised to be sure they really do that and, it seems, there would be exchange risk to be managed if it is backed by a multi-currency basket. Furthermore, there's operational risk to be considered, and it is hard to believe that would not be massive. Having the Fed examine it would not guarantee freedom from operational failure, but at least there would be someone looking over Zuckerberg's shoulder. And then there's anti-money laundering and sanctions oversight. Facebook should have to comply with at least the same requirements as banks, and perhaps more depending on the business model. And there's the competition issue. Banks are, appropriately, subject to stricter competition limits than other businesses; the same should apply to Facebook in its new payments role, which comes close to banking. And if it gets into lending (as some reports suggest), then the all of bank regulation follows, including fair lending and the rest. And then there's consumer privacy protection, where bank regulation is already ahead of the rest of the tech market (and should be tightened). There's nothing new under the sun and lots of existing laws and regulations should apply to Facebook's new venture. Prof. Stiglitz should collaborate with a banking law professor to develop a full picture.