Facebook applies for New York BitLicense for Libra cryptocurrency project: Report

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Facebook applies for New York BitLicense for Libra cryptocurrency project: Report

Image Credit: Coin Center

Tue, 02 Jul 2019, 06:30 am UTC

Social networking site Facebook is reportedly eyeing to obtain a cryptocurrency business license to use its recently unveiled cryptocurrency Libra in New York, according to Reuters.

Crypto companies that plan to operate in the Empire State need to obtain a BitLicense from the New York State Department and Financial Services (NYDFS).

Other than that, the social media giant is also reportedly in talks with regulators in England and Switzerland, likely discussing the compliance terms of its upcoming Libra project.

“The scrutiny that we’ve seen is something that we expected and welcome… We announced this early by design in order to have this discourse in the open and gather feedback,” a Facebook spokesperson said.

However, Sean Park, Founder and Chief Investment Officer of Anthemis, said the scope of Facebook’s regulatory compliance may need to meet thousands of different compliance.

“They will not get a free pass anywhere… And, given their intention to be global, they will ultimately need literally hundreds, perhaps thousands, of licenses from hundreds of different regulators across the globe,” the spokesperson added.

Libra plans to reinvest customer deposits in government bonds and currencies to make a reserve that will stabilize its price. As per Facebook’s representative, the reserves will comply with the monetary policies of the source countries, and Libra does not plan to obtain any local banking licenses.

Meanwhile, Facebook’s subsidiary Calibra, which will develop a wallet and financial services for the Facebook’s ecosystem, has already registered its money service business with the U.S. Financial Crimes and Enforcement Network (FinCEN), applied for money transfer licenses in the United States, and started processing for a BitLicense.

As previously reported, the Monetary Authority of Singapore (MAS), the country’s central bank, has reportedly voiced concerns on how Facebook’s Libra would function. MAS Managing Director Ravi Menon pointed out that the regulator needs to understand “how exactly it’s going to work,” so it can gauge the possible benefits of Libra over other existing electronic payment systems.

On the other hand, there are reports that have surfaced that Libra may not be made available in India, as the country’s existing regulations prohibit the use of banking network for blockchain currency transactions.

The United States’ Senate Banking Committee and the House Financial Services Committee are expected to conduct a hearing on Libra this month.