Facebook’s Project Libra has applied for a payment system license from the Swiss Financial Market Supervisory Authority (FINMA). FINMA says Libra’s service offerings will, however, require a broader oversight that would include operational risks, liquidity and more, according to a Reuters report on September 11, 2019.
Facebook Forging Ahead with Libra
Despite the strict regulatory scrutiny that Facebook’s cryptocurrency project has been subjected to, the Libra Association appears determined to slug it out till the end.
Per sources close to the matter, Facebooks Libra Association is trying to obtain a Swiss payment system license from the nation’s financial watchdog, FINMA. However, the regulator has made it clear that a payment system license may not be able to cover the entire breadth of Libra’s planned services.
FINMA notes that it would need to point its searchlight into all aspects of Libra’s operations, including its capital allocation for credit, how it handles market and operational risks, risk concentration and liquidity, as well as the management of the Libra reserve.
“Due to the issuance of Libra payment tokens, the services planned by the Libra project would clearly go beyond those of a pure payment system.”
Interestingly, the Libra Association has hinted that it has asked FINMA to clarify its status and that of Libra coin under Swiss supervisory law and is still holding constructive dialogue with the financial watchdog.
“We are discussing constructively with FINMA and we see a feasible pathway for an open-source blockchain network to become a regulated, low-friction, high-security payment platform.”
On September 10, 2019, Sigal Mandelker, United States Treasury Under Secretary of Terrorism and Financial Intelligence, Sigal Mandelker said in a meeting with FINMA, officials of the Bank of International Settlements (BIS) and other financial regulators, that Project Libra must operate in line with the strictest standards of combating money laundering and terrorist financing for it to see the light of day.
Notably, FINMA has also echoed the same sentiments, making it clear that “The highest international anti-money laundering standards would need to be ensured throughout the entire Libra ecosystem.”
Importantly, Libra spokesman, Dante Disparte, has revealed that the Geneva-based Libra Association is willing to dance to the tune of regulators to make the global cryptocurrency project a huge success.