The Swiss Financial Market Supervisory Authority (FINMA) has distributed a statement on Libra’s application for a “payment system license.” Initiated by Facebook, Libra is a digital currency attempting to facilitate payments globally outside of the traditional payments rails. The Libra Association is headquartered in Geneva, Switzerland and thus falls under the regulatory guidance of FINMA.
Switzerland is a Fintech friendly jurisdiction with dozens of crypto focused firms calling the Alpine nation their home.
The statement by FINMA said that receipt of the Libra application marks the start of the licensing process under Swiss supervisory law.
FINMA stated “the outcome and duration of the procedure remain open” highlighting the scrutiny the process will receive from global regulators.
To quote FINMA:
“FINMA confirms that it has received an application for a payment system licence under the Financial Market Infrastructure Act (FMIA) from the Libra Association (Libra) on the basis of an updated whitepaper. As is usual for new projects and start-up licences, the application is not complete in all particulars, but allows FINMA’s formal licensing process to commence. The application filed differs considerably from the project originally submitted (see link), e.g. with a view to the Libra payment system also supporting single-currency stable coins as well as the multi-currency Libra payment token. FINMA will now thoroughly analyse the application. As provided by the FMIA, it will impose extra requirements for additional services that pose increased risks. This applies in particular to bank-like risks. In addition, FINMA will give special consideration to whether strict national and international standards for payment infrastructures and also for combating money laundering can be upheld.”
FINMA said it will not provide any updates on the status of the process nor will it comment on the timing for any decision.
FINMA also said it is coordinating closely with partner authorities globally.
“FINMA has always emphasised that the planned international scope of the project requires an internationally coordinated approach. Accordingly, FINMA has been in close contact with the Swiss National Bank and more than 20 other supervisory authorities and central banks from around the world since the start of its dealings with the Libra project. Furthermore, FINMA is also actively contributing to various international working groups and committees and collaborating on the development of international policies on stable coins, for example, through the Financial Stability Board (FSB).”