The outgoing President and Finance Minister of Switzerland commented about Libra project on December 27, 2019. UeliMaurer maintained that the Libra project of Facebook has failed and needs to be reworked for approval.

According to him, Libra does not have a chance based on its state at the moment, “because central banks will not accept the basket of currencies underpinning it.”

The concern of regulators worldwide is that Libra is likely to increase the risk of money laundering as well as criminal actions via its international crypto that billions of Facebook users can access.

Three months ago, Sigal Mandelker highlighted the necessity of Libra by Facebook to meet the highest standards of regulatory compliance before it can be launched. Some days later, Libra cryptocurrency applied to be licensed as a payment system in Switzerland.

A request was sent to Switzerland’s financial regulator FINMA to assess how it would classify the Libra project. According to the regulator, Libra was looking into various services that would require additional oversight.

Besides, FINMA maintained the need for a project to pass through financial market infrastructure regulation and obtain a payment system license.

It is noteworthy that a payment system in Switzerland is “automatically subject” to the Anti-Money Laundering Act. That is, under the FMIA, any more service that increases the risks of a payment system requires corresponding further requirements.

According to FINMA, the additional conditions would be specifically associated with capital allocation, risk concentration and liquidity and Libra reserve management.

To obtain Swiss payment system license, it is required that the “returns and risks” associated with reserve management of the reserve be borne totally by the Libra Association.

It seems Libra will require a global strategy from regulators specifically as regards the exact qualifications to administer the reserve and its governance. It is also necessary to talk about the money laundering risks.

The associations noted the plan of maintaining AML guidelines from Libra. However, their members must ensure compliance if they want to offer financial services on the Libra network.

Besides, the association noted that financial involvement, legal consent and user protection are objectives to be achieved in corroboration with the focus of Libra to offer a simple international currency and financial infrastructure that assists numerous people.

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