In June this year, Facebook announced that they were entering the digital currency market as it has planned to launch its currency, Libra. Ever since the announcement was made, Libra has seen a backlash from all the governments as its association with Facebook has left people questioning its safety standards.
FINMA, however, thinks that if Libra is issued as a token for payments, then the planned services will go further than being a true payment system. These will lead to problems in the market, such as capital allocation for credit, risks to the market, and operations; many other issues will come along with it.
Libra, on the other hand, is trying their best to get approval from FINMA for a Swiss payment system license, and they see ways in which an open-source blockchain network will turn into a regulated, low-friction, high-security payment method.
While all this was happening, U.S. Under Secretary of Terrorism and Financial Intelligence Sigal Mandelker made the statement that no matter which cryptocurrency it is, they all have to meet the highest standards of safety. She added the anti-money laundering and terrorist financing systems should be present within the design of the systems.
FINMA and Sigal are concerned about Libra’s use, and with Facebook’s reputation in the past, we can’t ignore these range of services and their long term uses and outcomes.