Facebook's planned cryptocurrency, Libra, faced another setback this week. The proposed payment system now potentially faces the same rules that apply to banks, on top of anti-money laundering laws. This comes from an official statement from the Switzerland-registered Libra Association, a non-profit member organization established to govern the Libra network.
FINMA, Switzerland's financial market supervisor, has said "the project is more than just a simple payment system," suggesting Libra would be subjected to extra requirements "from liquidity and capital allocations for risk to the management of reserves that will back the digital tokens." Libra is attempting to avoid the current volatility associated with cryptocurrencies by backing the currency with reserve assets. Whether the risks and returns associated with the reserve will be borne by the currency holders or Libra Association remains up in the air.
With a projected launch date of June 2020, this setback represents just one of the hurdles facing wider adoption of cryptocurrencies.
