Odaily Frontline | The Swiss Financial Supervisory Authority confirmed that Libra is seeking a payment system license and gave three points of feedback

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2019-09-11 17:44 (UTC+8)

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"The rewards and risks associated with the reserve are solely borne by the Libra Association, not the currency holders."

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"The rewards and risks associated with the reserve are solely borne by the Libra Association, not the currency holders."

This article comes fromCointelegraph, original author: Marie Huillet

Odaily Translator |

The Swiss Financial Market Supervisory Authority (FINMA) has released a stablecoin-focused guidance document to complement its existing ICO guidance. In a Sept. 11 press release, FINMA said it had noticed a steady increase in stablecoin issuance since mid-2018, and confirmed that the Geneva-based Libra Association had sought FINMA’s approval of Facebook’s stablecoin under Swiss law. Project Libra is evaluated.

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"Same risk, same rules"

Regulatory requirements for stablecoins will vary depending on the assets they anchor (such as currencies, commodities, real estate or securities) and the legal rights of their holders. Therefore, relevant requirements may be extended to areas such as money laundering, securities trading, banking, fund management and financial infrastructure supervision.

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FINMA Confirms Libra Association Is Seeking Evaluation

FINMA pointed out that the Libra project currently proposed by Facebook will require a payment system license under the Swiss Financial Market Infrastructure Act (FMIA).

The regulator pointed out that any additional services (such as banking-related risks) that may increase the risk of a certain payment system will be addressed by implementing additional regulatory requirements in accordance with FINMA's "same risk, same rules" principle.

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Three key feedbacks from FINMA on Libra

“Since Libra issues payment tokens, the scope of the program’s services will clearly go beyond a pure payment system, so these additional requirements need to be met.”

These additional requirements will apply to the Libra Association's capital allocation recommendations for credit, market and operational risk, risk concentration, liquidity and management of the Libra Reserve.

FINMA also noted that the Swiss payment system license has the advantage of allowing a combination of banking and infrastructure regulations.

The regulator further emphasized that the necessary conditions for the Libra network to obtain a payment system license are:

"The returns and risks associated with reserve management are borne solely by the Libra Association, not by 'stablecoin' holders like fund providers."

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