Facebook won’t just be skating by with a standard payments license in Switzerland, according to the country’s regulatory body, FINMA.
The agency reportedly believes that additional requirements are necessary as a result of the company’s ambitious financial aims with its cryptocurrency, Libra.
Libra will reportedly be a stablecoin which taps into Facebook’s existing, massive user base. The cryptocurrency will shoot for a global distribution and rollout, among its hundreds of millions of users, with notable exceptions including China.
Libra Could Take Over The World – With The World’s Approval
China is reportedly developing its own cryptocurrency, while convenient, peer-to-peer options such as WeChat Pay and AliPay have existed for quite some time in the region.
Around the world, people have become increasingly attuned to the idea of using their phones to make payments.
Apple forwarded the notion this year with its mobile debit card rollout – a product which can be damaged simply by being mixed with blue jeans.
Facebook Faces Increased Swiss Scrutiny
FINMA said in a statement that Facebook will have to face additional scrutiny, above and beyond what other companies operating in the country might have to deal with.
In a press release, the agency said:
“Under the [Financial Markets Infrastructure Act], all additional services that increase the risks of a payment system must be subject to corresponding additional requirements. […] Due to the issuance of Libra payment tokens, the services planned by the Libra project would clearly go beyond those of a pure payment system and therefore be subject to such additional requirements.”
FINMA is far from the only government body which has taken issue with Facebook and its massive Libra project.
US lawmakers have roundly dismissed the project as alternatively dangerous or outwardly, in some way or another, a genuine threat to the US financial hegemony.
Governments historically become alarmed if a fundamental change to the way people do business may be afoot.
Facebook’s Libra project potentially promises just that, with people having the ability to suddenly make peer-to-peer payments around the world.
Using cryptocurrency as a settlement mechanism, Facebook could potentially solve the problems that Western Union and even Bitcoin have been trying to solve. With very little extra information about their customer base, the company can essentially create a payments network which spans the globe – to include businesses.
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This could be transformative.
Especially if the crypto token is likewise exchangeable on crypto exchanges and potentially usable at things like Bitcoin ATMs.
In such a reality as that, the sky is the limit.
Partners in the project, who helped build such infrastructure, would likely see a return on their investment.
Cross-border remittances, at a minimum and as only one use case, represent a huge portion of the money that flows in the world. Taking those out of the realm of traditional banks, and leveraging an existing peer-to-peer network of many, many millions, could mean a serious boon to global and digital commerce.
But governments will have to give the greenlight on all of the above.
Thus far, Facebook hasn’t been welcomed with open arms by any government. The company, who have had their share of very public mistakes and controversies, is treated more with suspicion than what might be taken for encouragement of any kind.
Nevertheless, no one at Facebook has yet expressed a doubt that their product will see the light of day. Even with rabid lawmakers calling for the dismantling of the project outright, the company believes it will be able to establish a global payments network – and soon.