min to read

2019-09-11 20:14:05




News

Switzerland introduced a guide to stablecoins. Libra will need additional regulation

#FacebookLibra

min to read

2019-09-11 20:14:05

The Swiss Financial Markets Supervision Authority (FINMA) has published an addendum to the existing Initial Token Offerings (ICO) Guide. Focused on the so-called stable coins, it pays special attention to the digital currency Libra from Facebook.

The Swiss Financial Markets Supervision Authority (FINMA) has published an addendum to the existing Initial Token Offerings (ICO) Guide. Focused on the so-called stable coins, it pays special attention to the digital currency Libra from Facebook.

 

In the document published on Wednesday, September 11th, FINMA confirmed that Geneva-based Libra Association was asking the regulator to bring its operations in line with Swiss law.

 

According to FINMA, if the Financial Market Infrastructure Act is taken into account, the digital currency from Facebook in its current form requires a payment system license. Its issuance implies that the companies take sufficient measures to manage cybersecurity risks and combat money laundering.

 

The regulator also emphasized that any additional services that may increase the risks of the payment system would require additional regulation.

 

“In connection with the issuance of Libra payment tokens, the services planned by the project clearly go beyond pure payment systems and therefore are the subject to additional requirements,” the FINMA management said.

 

These additional requirements apply to the proposed by the Libra Association allocation of capital for credit, market and operational risks, risk concentration, as well as liquidity and Libra Reserve management, the regulator noted.

 

Regarding stablecoins directly, they, according to FINMA, are subject to the current rules for regulating tokens on the blockchain, however, they can be regulated by special conditions depending on what assets are used to secure them: currencies, exchange goods, real estate or securities.

 

“The projects of individual stablecoins can significantly vary in legal, technical, functional and economic terms. For this reason, the development of a generalized classification is not possible. Money laundering, securities trading, banking, asset management and financial infrastructure regulation - all of these issues may be relevant to stablecoins, ” – the document says.

 

It should be mentioned, that earlier in September, a member of the Executive Board of the European Central Bank, Yves Mersch, claimed that the Libra project from Facebook jeopardizes both monetary policy in the EU and end users of digital currency.

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