Following a request from Facebook, Swiss financial market regulator Finma published a list of requirements that the company would have to fulfill if it wanted to launch the Libra cryptocurrency. The U.S. company hasn’t yet lodged a formal request for a license.

Following the announcement of its intention to launch the Libra currency with a base in Switzerland, Facebook had asked Finma to define the tasks it had to work on before it would be able to get going. The Bern-based regulator on Wednesday published the list of requirements for so-called stable coins, which shows that the U.S. tech giant will have plenty of tasks to fulfill.

First of all, Facebook needs to get a license for Libra as a payment system on the basis of the regulation of the financial market infrastructure in Switzerland. The project will need to comply with international standards, in particular the principles for financial market infrastructures, mainly in connection with cyber risks, Finma said.

Subject to Money-Laundering Regulation

A payment system such as the mooted Libra currency is automatically subject to the money-laundering law of Switzerland. It has therefore to comply with the highest international standards for the fight against money laundering throughout the entire eco-system of Libra. In other words, Libra would have to be immune against elevated money-laundering risks, Finma specified in its assessment.

According to the Facebook plans for Libra, the services planned by the project would go beyond those of a pure payment system and would therefore be subject to additional requirements addressing the potential risks. The additional requirement would relate to capital allocation (for credit, market and operational risks), risk concentration and liquidity as well as the management of the Libra reserve, Finma said.

Procedure Begins When Application Is Filed

«A necessary condition for being granted a license as a payment system would be that the returns and risks associated with the management of the reserve were borne entirely by the Libra Association and not – as in the case of a fund provider – by the ‘stable coin’ holders,» Finma added.

The Swiss regulator also said that the international scope of the project required an equally international approach and cooperation. Finma said that the licensing procedure under Swiss supervisory law would only begin once a specific application had been filed to Finma.