The Swiss Financial Market Supervisory Authority (FINMA) has confirmed that it has received an application from the Geneva-based Libra Association for a payment system licence. This was foreshadowed by Libra, who announced an intention to make this application last year. In the announcement, FINMA does not say how long the application process might take, but suggests that Libra should expect a high level of scrutiny.
Interestingly, FINMA confirms that the application has been made on the basis of the Libra Association's updated Whitepaper released in April 2020, rather than the project as initially described in the June 2019 Whitepaper and technical documentation.
FINMA's press release also notes that:
As is usual for new projects and start-up licences, the application is not complete in all particulars, but allows FINMA’s formal licensing process to commence
As expected, FINMA , in particular, it will:
give special consideration to whether strict national and international standards for payment infrastructures and also for combating money laundering can be upheld.
Where FINMA considers that Libra is providing a service that poses increased risk, FINMA will impose additional requirements on Libra's payment services licence to account for those risks. FINMA specifically highlights that any bank-like risks will be carefully considered.
FINMA does however say that it is in ongoing close contact with the Swiss National Bank and more than 20 other supervisory authorities and central banks from around the world in relation to the Libra project. This is unsurprising, given the consistent comments from central banks, regulators and governments around the world that an internationally consistent approach is preferable to what may amount to the largest private currency experiment to date.
This licence application follows Libra's recent substantive amendments to its Whitepaper, following its original publication in June 2019. We've written about the changes to Libra's Whitepaper here.