The Swiss Financial Market Supervisory Authority (FINMA) has <a href="https://www.finma.ch/en/news/2019/09/20190911-mm-stable-coins/?pk_campaign=News-Service&amp;pk_kwd=FINMA%20publishes%20%E2%80%98stable%20coin%E2%80%99%20guidelines">published</a> new guidelines for Stablecoins including Facebook’s Libra project.

However, FINMA has reported it has received a request from the Libra Association for an assessment on the Libra project under Swiss supervisory law. FINMA adds that such requests are standard practice for innovative projects.

In particular, earlier this year, Facebook announced the creation of the Libra cryptocurrency; a Stablecoin to be backed by a basket of assets which will include various fiat currencies and perhaps other assets. The Facebook Libra has received mixed reactions all over the world. . Recently, congressional hearings held in Washington saw both parties question Facebook’s efforts in building a non-sovereign global currency.

The regulator made an announcement on Wednesday that it classifies Stablecoins under the current approach of blockchain-based tokens.  Additionally, rules for Stablecoins may differ depending on the assets they are backed by, i.e. currencies, commodities, real estate or securities.

Moreover, as Stablecoins can greatly vary in structure; the supervisory requirement may differ depending on assets that make up the crypto. Money laundering, securities trading, banking, fund management, and financial infrastructure regulation can all be relevant.
<h2>Facebook Libra</h2>
In particular, for <a href="https://www.cryptoknowmics.com/crypto/facebook-libra-stablecoin-tied-to-major-currencies-maybe-not-tied-to-yuan/">Libra</a>, a necessary condition for being licensed as a payment system; would be that the returns and risks associated with management of reserve; were borne entirely by Libra Association and not by the Stablecoin holders.

In addition, the planned scope of the Libra project requires an internationally coordinated approach. Particularly, the definition of the requirements for managing the reserve, and the governance around it and also combating money laundering should be developed on an international scope.

Furthermore, according to the publication; possible licensing under the Swiss supervisory law would only start once specific licensing applications were received by FINMA. In accordance to FINMA’s practice, FINMA would neither provide public information on the status of any ongoing licensing procedure nor speculate on when it may be complete.

In conclusion, FINMA said other questions raised in the context of the Libra project, such as tax law, competition law, data protection law; go beyond the scope of supervisory law and are therefore outside FINMA’s remit.

Swiss Regulator FINMA Issue Guidelines for Stablecoins Including Libra

The Swiss Financial Market Supervisory Authority (FINMA) has published new guidelines for Stablecoins including Facebook’s Libra project... %

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Swiss Regulator FINMA Issue Guidelines for Stablecoins Including Libra

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