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Facebook’s announcement of its project Libra initiated several conversations about cryptocurrency and the asset class’ regulation.
These digital assets have been around for years but Libra, and the potential it carries led to authorities paying increased attention to crypto-assets and developing regulatory frameworks to accommodate them.
Facebook is in partnership with several companies such as MasterCard, Uber, and Spotify in the Libra Association.
The Association is headquartered in Switzerland where most of the activity surrounding the creation of the cryptocurrency is occurring.
Not too concerned about Libra
The head of FINMA, Mark Bronson, said that he has more significant concerns regarding the dark corners of cryptocurrency than he is with Facebook’s project Libra.
He noted that crypto projects that are created without the scrutiny of authorities present a greater danger than those such as Facebook’s project Libra, which is being developed transparently.
He added that the projects being developed outside of regulatory scrutiny spread themselves out in cyberspace and by the time authorities catch up, it is too late for them to stop the activity around them.
Bronson went on to say that Libra will receive as much scrutiny as banks and other financial institutions in the country, and this means that it will be under tight control from the regulator.
The project will be subject to strict anti-money laundering (AML) laws, but he clarified that these regulations are not meant to hamper the project’s progress.
Bronson said that the regulator is not there to make such projects impossible and that they will respond to them with an open mind.
Swiss laws favorable for Libra
Switzerland has long been known as a financial haven, and this may be the reason why the Libra Association decided to set up its headquarters in the country.
Several European regulators are wary of cryptocurrencies, and they have put in place regulations to stifle the growth of the industry and asset class within their jurisdictions.
Switzerland may be one country in which the crypto industry has the potential to flourish.
In early September, Bronson said that Libra’s structures allow it to fit perfectly within existing frameworks in the country.
The head of FINMA mentioned that they have published a guide for the classification of stablecoins under Swiss regulations, and they do not need new laws for the asset class.
He went on to clarify that they are aware of the risks that come with cryptocurrencies, including money laundering, user protection, and stability of the networks on which the assets run.
Besides Libra, there are many other blockchain and crypto related firms that have set up shop in Switzerland.
The developments around Libra will have a bearing on how the rest of the industry in the country will be governed, and these companies will be keeping an eye on how Libra progresses.
Many people in Switzerland participate in crypto trading, with Bitcoin at the top of the list of preferred coins. These people will benefit from the regulations put in place that are welcoming to cryptocurrency.