Facebook’s cryptocurrency project to pursue payments license in Switzerland

The group overseeing Facebook’s digital currency project on Wednesday announced it is planning to pursue a payments license in Switzerland.

The Libra Association said it has asked the Swiss Financial Market Supervisory Authority (FINMA) to offer more insight into how the coin – called the “Libra” – will be regulated by the country’s government.

{mosads}The announcement comes as global regulators have ramped up their scrutiny and criticism of Libra, particularly taking issue with Facebook’s decision to position the Libra Association in Switzerland, a country known for its relatively lax financial regulatory environment.

The Libra Association in the statement on Wednesday said Switzerland “offers a pathway for responsible financial services innovation harmonized with global financial norms and strong oversight.”

“Since our vision for the Libra project was announced 3 months ago, we have maintained our commitment that technology-powered financial services innovation and strong regulatory compliance and oversight are not in competition,” Dante Disparte, Libra Association’s head of policy and communications, said in a statement. “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.”

Lawmakers on Capitol Hill have zeroed in on the Swiss nonprofit that will run the Libra coin, ripping the decision as a method to bypass U.S. regulatory scrutiny.

“We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight,” Sen. Sherrod Brown (Ohio), the top Democrat on the Senate Banking Committee, said after Libra was announced earlier this year.

The Libra Association and Facebook have insisted they will not launch the Libra coin until they have satisfied global financial regulators.

Facebook earlier this year unveiled its plans to launch Project Libra, a payments system based on a cryptocurrency supported by more than two dozen major corporations, including Uber, Mastercard, Spotify, Vodafone, Coinbase and the nonprofit organization Women’s World Banking.

Facebook said that the cryptocurrency project would be operated by the nonprofit Libra Association and remain separate from the social media platform.

Lawmakers from both parties on Capitol Hill have offered blistering rebukes of Facebook’s plan, saying the new financial system raises concerns over money laundering and even terrorism financing.

While Libra will be controlled by the Swiss nonprofit, the company will operate a virtual wallet called Calibra that is operated by a Facebook subsidiary and will be made available on Facebook’s messaging services WhatsApp and Messenger.