Today the Libra Association announced it has formally applied for a payments license to the Swiss Financial Markets Supervisory Authority (FINMA).
The blockchain and digital currency group says FINMA’s regulatory supervisory college gets input from central banks and regulators around the world.
Seven months ago, the Libra Association requested clarification of its status and the Libra coin from Swiss regulator FINMA. The regulator published an initial response in a matter of hours emphasized the oft-quoted regulator stance of “same risk, same rules”.
Apart from referring to itself as a ‘payments system’, Libra confirmed a number of changes to its initial plans. Originally the Libra coin was to be backed by a basket of currencies. It now says it could support single currency stablecoins.
When it first unveiled in June last year, it was a public permissioned blockchain with a plan to transition to a permissionless platform when the technology was sufficiently performant. It now says it will remain permissioned.
And thirdly, it says it is implementing a compliance and risk management framework including strong anti money laundering (AML), counter terrorism finance (CTF) standards as well as combatting illicit activities.
It reiterated its commitment to financial inclusion and has updated its whitepaper.
Since Facebook announced Libra, there has been a barrage of pushback from regulators and central banks around the world. That’s driven by concerns that a Libra currency could challenge sovereign currencies, worries about privacy given Facebook’s track record, as well the potential for it to dominate cross border payments with Facebook’s 2.7 billion audience.
Those concerns triggered the departure of some of the larger Libra members such as Visa, Mastercard, eBay and Paypal.
We recently published an article regarding the Libra antitrust concerns in which we also highlighted the unusual situation where the governments are potentially regulating their own competition.
More to follow.
