Facebook’s cryptocurrency project Libra has applied for a payment licence from Switzerland’s financial watchdog, following a widespread backlash from politicians and regulators.
The Libra Association announced today that it intended to apply for a licence from Switzerland’s Financial Market Supervisory Authority (FINMA) to be regulated as a payment systems operator and had “submitted a request for a ruling to clarify the regulatory status” of the new currency to ensure it is given the appropriate licence.
“We are engaging in constructive dialogue with FINMA and are encouraged to see a feasible pathway for an open-source blockchain network to become a regulated, low-friction, high-security payment system,” said Dante Disparte, Libra’s head of policy and communications.
Disparte said the application was “an important step in Libra’s evolution”.
“Since our vision for Libra was announced 3 months ago, we have maintained our
commitment that technology-powered financial services innovation and strong
regulatory compliance and oversight are not in competition,” Disparte said.
The decision by the Geneva-based project to seek a licence comes after concerns were raised by regulators and lawmakers across the globe that the digital currency could be used for money laundering and financial terrorism.
Facebook announced the launch of Libra in June. Libra will be tied to a group of “low-volatility assets” in an attempt to reduce the currency’s volatility, the social media giant said, and its launch will be overseen by a consortium of 28 companies including Visa, eBay and Uber.
But the European Central Bank (ECB) has warned that Libra could undermine its powers to set monetary policy and reduce its control over the euro, while Bank of England governor Mark Carney said Libra has “got to be rock solid from the start or it’s not going to start.”
The head of the UK’s Financial Conduct Authority (FCA), Andrew Bailey, has said Facebook “will not walk through authorisation” for the currency without deep engagement with regulators.
Main image credit: Facebook Libra