The Libra cryptocurrency project has applied for a Swiss payment system license after tweaking its design to meet regulatory concerns. Libra says it will now offer stablecoins backed by single currencies, in addition to its original multi-currency pegged digital token concept.This content was published on April 16, 2020 - 18:56
The Facebook-backed Libra project met with high levels of media interest and a regulatory backlash when it launched its association in Geneva last year. It wants to create a new type of digital currency to allow faster and more efficient payments between people.
To stop the cryptocurrency from fluctuating too wildly, Libra planned to anchor it to a basket of different currencies. However, central banks including the Swiss National Bank said this could undermine their ability to ensure price stability.
On Thursday, Libra said it had come up with a new plan to meet these concernsExternal link. It now plans to add a new selection of stablecoins, each one backed by one single currency.
The Swiss Financial Market Supervisory Authority (FINMA) acknowledged on Thursday that it had received an application from Libra for a payment system license. FINMA said the application now “differs considerably from the project originally submitted” last year.
However, the supervisor said it would still “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.”
The regulatory backlash in 2019 saw the Libra Association lose several founding members, including PayPal, Visa and Mastercard. In its new position paper, Libra said it had launched a drive to attract new members.
It said it wants to “offer new entrants the ability to compete for the provision of core network services and participate in the governance of the Libra network, while ensuring the Association’s ability to meet regulatory expectations.”
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