FINMA to Strictly Scrutinize Libra for Payment System License
- The regulator will focus on anti-money laundering standards of the project.
This came after the social media company announced that it is seeking a license from the Swiss Financial Market Supervisory Authority (FINMA) to operate as a regulated payments system.
“For bank-like risks, for example, bank-like regulatory requirements would apply,” the regulator stated. “The highest international anti-money laundering standards would need to be ensured throughout the entire ecosystem of the project.”
A crypto to ease cross-border Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term
Facebook announced its plans to launch a digital currency in June and is aiming to bring it to the masses by next year. To oversee its upcoming currency, it set up a non-profit, The Libra Association, in Geneva and partnered with 27 tech and payment companies.
In a hearing before US lawmakers, Libra’s head David Marcus clarified that the social media company would seek approval from Swiss regulators for Libra as the European country is the base for its crypto project.
However, Libra’s attempt to get the payment license has now attracted the attention of the Swiss regulator, which earlier was not vocal about the project.
“If a financial center has ambitions, it must be able to live with attention,” Mark Branson, head of FINMA, told The New Zurich Times in an interview.
Addressing the hostility of global regulators towards Libra, Branson added: “A project of such a global dimension can be addressed only via international coordination and consultation with other supervisors and regulators...It is illusory to believe a single country can regulate and oversee a project like Libra on its own. The supervision of UBS or Credit Suisse also does not take place in complete isolation.”
He also pointed out that the Swiss regulator would focus on minimizing money laundering with the crypto.
“New technologies can also bring benefits in the fight against money laundering, for example, if traceability of transactions becomes fully available. So there are risks and opportunities,” Branson added.
This came after the social media company announced that it is seeking a license from the Swiss Financial Market Supervisory Authority (FINMA) to operate as a regulated payments system.
“For bank-like risks, for example, bank-like regulatory requirements would apply,” the regulator stated. “The highest international anti-money laundering standards would need to be ensured throughout the entire ecosystem of the project.”
A crypto to ease cross-border Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term
Facebook announced its plans to launch a digital currency in June and is aiming to bring it to the masses by next year. To oversee its upcoming currency, it set up a non-profit, The Libra Association, in Geneva and partnered with 27 tech and payment companies.
In a hearing before US lawmakers, Libra’s head David Marcus clarified that the social media company would seek approval from Swiss regulators for Libra as the European country is the base for its crypto project.
However, Libra’s attempt to get the payment license has now attracted the attention of the Swiss regulator, which earlier was not vocal about the project.
“If a financial center has ambitions, it must be able to live with attention,” Mark Branson, head of FINMA, told The New Zurich Times in an interview.
Addressing the hostility of global regulators towards Libra, Branson added: “A project of such a global dimension can be addressed only via international coordination and consultation with other supervisors and regulators...It is illusory to believe a single country can regulate and oversee a project like Libra on its own. The supervision of UBS or Credit Suisse also does not take place in complete isolation.”
He also pointed out that the Swiss regulator would focus on minimizing money laundering with the crypto.
“New technologies can also bring benefits in the fight against money laundering, for example, if traceability of transactions becomes fully available. So there are risks and opportunities,” Branson added.