Swiss financial authorities say Facebook’s Libra digital coin would face strict oversight including anti-money laundering protections and bank-like regulation, potentially requiring the cryptocurrency to set aside billions of dollars in capital reserves.
Although costly, the supervision could help Libra achieve its goal of distinguishing itself from other cryptocurrencies such as Bitcoin and Ethereum, which are viewed as speculative investments rather than stable digital tender for online transactions.
It would also help Libra counter skepticism from lawmakers in the U.S. and elsewhere who have raised concerns about Facebook entering the financial industry. The social media giant was fined $5 billion in July for violating its users’ privacy.
The Swiss Financial Market Supervisory Authority was responding to the Libra Association’s decision to apply for a license to join Switzerland’s financial payment system. The license would allow Libra transactions to be settled through the same payment system that is used to manage real-time transactions between banks and other financial institutions.