The Libra Association announced Wednesday it has filed a request with the Swiss Financial Market Supervisory Authority (FINMA) for a ruling that would clarify Libra’s status and that of the Libra coin. The association also said it plans to file an application with FINMA for a license to operate as a payment system.
The Geneva-based association was unveiled in June in conjunction with the ambitious Libra cryptocurrency project. Giant social network Facebook Inc. developed Libra but turned it over to the non-profit association, whose membership consists of some 28 corporations, including four payments companies.
Since it was announced, Libra has encountered stiff criticism from lawmakers and regulators around the world, many of whom are concerned about the prospect of a global currency under the control of privately held corporations. Critics are also concerned about what they perceive as a history of privacy violations and other issues at Facebook. The social network and other companies involved in the project, however, have positioned the blockchain-based coin as a potential solution for unbanked and underbanked populations and others without access to existing digital-payment systems.
“Since our vision for the Libra project was announced three months ago, we have maintained our commitment that technology-powered financial-services innovation and strong regulatory compliance and oversight are not in competition,” said Dante Disparte, the association’s head of policy and communications, in a statement accompanying Wednesday’s announcement. “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. 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.”
Libra’s backers also position the open-source network as a base on which entrepreneurs can develop new services to address payments markets historically beset by high costs or low margins, such as cross-border remittances and micropayments.