Facebook’s Libra To Register as Payments System in Switzerland

Facebook Libra stablecoin payments Switzerland FINMA

Facebook is planning to register its Libra stablecoin as a payments system in Switzerland, in a move the company hopes could see it win a license from local regulators.

The move was confirmed by Swiss regulator FINMA, which said in guidance notes published today that it had been asked for its assessment on whether and how Libra should be regulated in Switzerland.

The attempted registration is the latest development on the regulatory front as Facebook battles against regulators globally ahead of its proposed international rollout.

However, in a statement, FINMA said that it appears as though Libra may go beyond a typical payments system, which may require additional regulatory oversight.

“Due to the issuance of Libra payment tokens, the services planned by the Libra project would clearly go beyond those of a pure payment system.”

In its “indicative classification” of the project, FINMA said the project would be governed by “financial market infrastructure regulation,” which would suggest regulation beyond that applied to basic payment systems.

According to the regulator, classification would be decided with reference to the “same risks, same rules” principles of market regulation.

“Under the FMIA, all additional services that increase the risks of a payment system must be subject to corresponding additional requirements. This means that all the potential risks of a Swiss payment system, including bank-like risks, can be addressed by imposing appropriate requirements in line with the maxim ‘same risks, same rules’.”

The Libra Association, which was set up to steer the project, said it remained in “constructive dialogue” with Swiss regulators over the journey toward registration.

“We are engaging in constructive dialogue with FINMA and we see a feasible pathway for an open-source blockchain network to become a regulated, low-friction, high-security payment system.”

The news comes at a time of increasing engagement between Facebook and financial regulators worldwide, with the social giant keen to steer through its stablecoin project as a regulated platform for digital currency transactions.

With other regulators around the world currently considering their own response, any decision from the Swiss regulator will be eagerly anticipated, both by Facebook and by other regulators shaping their response to the stablecoin proposals.