Libra Submits Payment System License to FINMA, Association Updates Its White Paper
- Libra is on its first steps to receive a payment service license from the Swiss authorities.
- The “outcome and duration of the procedure” to grant a payment license to the Facebook-led cryptocurrency remains open.
- David Marcus, Libra CEO, launches new whitepaper revealing plans to introduce single-currency stablecoins and more compliance regulation on the platform.
In an official report released on Thursday, April 16, 2020, the Swiss Financial Market Supervisory Authority (FINMA) acknowledged they had received a payment license application by Libra. This marks a step towards regulation by the Facebook-led Association after facing multiple run-ins with global financial authorities. However, the process to obtain the license remains open.
In the application, FINMA claims Libra has significantly changed this application from the initial one posted with FINMA in 2018 for a “stable coin.” The report reads,
“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.”
Libra eases “global currency” push with latest move
Regulators and central banks around the world have to some extent been against the adoption of Libra. Their main concern has been that a Libra currency could possibly challenge other sovereign currencies. With Facebook’s 2.7 billion audience, banks fear that Libra has the potential to dominate cross border payments globally. Some of the giant Libra members like MasterCard, PayPal, eBay and Visa were forced to withdraw from the project amid all the uncertainties revolving around it.
Now, the Association looks to lean into regulation to soften the stance taken by global financial authorities. According to David Marcus, Libra will develop a “comprehensive network-level system around anti-money laundering (AML), Combating the Financing of Terrorism (CFT), and sanctions enforcement” in a bid to follow regulation and ease monetary regulators concerns.
David Marcus also tweeted on the developments made by the association since launch stating the massive progress in members’ contribution and self-funding nature of the Association – Facebook only contributing 10% of the total fund. Marcus also touched on the switch to a multi-currency Libra stablecoin backed by different top fiat currencies.
Most notable evolutions are:
a) the creation of single currency stablecoins, e.g. ≋USD, ≋EUR, ≋GBP, in addition to Libra Coin (≋LBR), which will now be a Move smart contract “stitching” together fixed nominal weights of underlying stablecoins. 3/8
— David Marcus (@davidmarcus) April 16, 2020
David Marcus unveils new updated Libra whitepaper
Calibra CEO, David Marcus unveiled the changes expected on Libra platform since launching back in June 2019. The newly unveiled whitepaper introduces four main changes including addition of multi-currency Libra stablecoins, switching to a permissionless network, security systems to strengthen the quality of the Libra Reserve and securing the system with a “robust compliance system”.
The key update is the addition of multi-currency stablecoins backed by different fiat currencies such as USD, EUR and GBP alongside the singlestable coin backed by multiple currencies, Libra. This is in a bid to please the regulators who have been biting their backs since their launch. The whitepaper reads,
“We are therefore augmenting the Libra network by including single-currency stable coins in addition to ≋LBR, initially starting with some of the currencies in the proposed ≋LBR basket (e.g., LibraUSD or ≋USD, LibraEUR or ≋EUR, LibraGBP or ≋GBP, LibraSGD or ≋SGD).”
“This will allow people and businesses in the regions whose local currencies have single-currency stable coins on the Libra network to directly access a stable coin in their currency.”