Facebook is seeking a payment system license under Switzerland’s Financial Market Supervisory Authority (FINMA) for its planned stablecoin project, Reuters reported on Sept. 11.
“Regulated, low-friction, high-security” blockchain payments
In an official statement today, the Switzerland-registered Libra Association — a not-for-profit membership organization established to govern the Libra network — explained its choice to coordinate a regulatory framework with the Swiss watchdog:
“Switzerland offers a pathway for responsible financial services innovation harmonized with global financial norms and strong oversight. 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.”
FINMA has notably this summer released guidance on regulatory requirements for payments on the blockchain, which applies to blockchain service providers including exchanges, wallet providers and trading platforms.
The guidance adheres to the framework for digital asset regulation issued this June by the intergovernmental Financial Action Task Force (FATF), which includes provisions for Anti Money Laundering (AML) measures, Know Your Customer compliance, risk-monitoring systems and more.
FINMA has gone a step further than the FATF’s provisions in refusing to exempt payments that involve unregulated wallet providers from its oversight.
AML, CTF concerns
Earlier this week, a United States Treasury official had told reporters in Geneva that it was imperative that the Libra project satisfy the highest standards for combating money laundering and countering terrorism financing if it is to be approved by regulators and lawmakers.
At a hearing before U.S. representatives in mid-July, David Marcus — chief of Facebook’s Calibra wallet service — had claimed that the choice had “nothing to do with evading regulations or oversight,” arguing instead that the jurisdiction is an international hub conducive to doing business.
In August, U.S. lawmakers visited Switzerland to meet with local financial regulators and government officials about Libra, expressing their persistent “concerns […] with allowing a large tech company to create a privately controlled, alternative global currency.”
On Sept. 5, Swiss National Bank President Thomas Jordan said that stablecoins pegged to foreign currencies could — in some circumstances — adversely impact Switzerland’s monetary policy.