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Facebook's Libra seeks Swiss license after backlash for crypto project

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Facebook's cryptocurrency lead David Marcus testifies to the House Financial Services Committee on Libra in July. Photo: REUTERS/Joshua Roberts

Facebook’s (FB) cryptocurrency project Libra has applied for a payment license from Switzerland’s financial watchdog, following extensive backlash from policymakers globally.

The Libra Association announced on Wednesday it is applying to Switzerland’s Financial Market Supervisory Authority (FINMA) to be regulated as a payment systems operator.

The Libra Association has also asked FINMA to clarify its legal status to ensure it has the right license. Dante Disparte, Libra Association’s head of policy and communications, said the organisation was “engaging in constructive dialogue with FINMA.”

“Since our vision for the Libra project was announced 3 months ago, we have maintained our commitment that technology-powered financial services innovation and strong regulatory compliance and oversight are not in competition,” Disparte said in a statement.

“This is an important step in Libra project’s evolution, and we look forward to continuing our engagement with all stakeholders over the coming months.”

READ MORE: Bank of England's Carney warns Libra: 'This is not learning on the job stuff'

The Geneva-based Association’s decision to seek regulatory approval follows extensive backlash from lawmakers and regulators globally.

Facebook publicly announced its much-anticipated cryptocurrency project Libra in June. The social media giant said it was setting up a consortium of 28 companies, including Visa, MasterCard, Uber, and eBay, that would oversee the launch of Libra next year.

The cryptocurrency aims to be a global currency, backed by a basket of assets such as the dollar and euro, that would help millions of people in emerging markets access basic banking services.

However, the project’s announcement sparked an immediate backlash from politicians and regulators around the world, amid concerns about everything from money laundering to monetary policy implications and privacy concerns.

Bank of England governor Mark Carney said in July: “This is not learning on the job stuff. It’s got to be rock solid from the start or it’s not going to start.”

David Marcus, the Facebook executive overseeing the cryptocurrency project, faced days of questioning from sceptical politicians in Congress earlier this year. Marcus said at the time Libra would seek Swiss regulatory approval and pledged not to launch the project until it has “fully addressed regulatory concerns,” casting doubt on the 2020 launch date.

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