Facebook has applied for a cryptocurrency business license. This is done in order for Facebook to operate within the state of New York with their new crypto project – Libra.
Just recently, Facebook has applied for the New York BitLicense issued by the New York State Department and Financial Services for its Libra crypto project. Every crypto project that wants to operate within the state of New York has to acquire a BitLicense.
Additionally, other sources reveal that Facebook is also in talks with regulators in the United Kingdom and Switzerland. Not only that, a few experts say that Facebook will need to comply with hundreds, maybe even thousands of different regulatory standards.
“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,” said Sean Park, the founder and Chief Investment Officer at Anthemis.
Since Facebook announced their new Libra project, the feedback has been pretty brutal, if you may. This has been the talk of the week since it came out and still is. The U.S. government has ordered to pause the project until they conduct a hearing this month. Many experts are saying that it definitely won’t be global, while also discussing the actual use cases for this currency.
Facebook, on the other hand, welcomes this critique and says they expected it:
“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.”
Calibra is Already Registered in the U.S.
At the same time, Calibra, the Libra subsidiary which will operate as a wallet and a financial service platform, has already registered their money services with the U.S. Financial Crimes and Enforcement Network (FinCEN). They have applied for money transfer licenses in the U.S., and also started the process for applying for a BitLicense.
Meanwhile, Libra plans to reinvest all customer deposits in government currencies and bonds to make a reserve. This reserve is meant to stabilize the Libra price. A Facebook representative explained that these reserves will comply with the monetary policies of any of the source countries. And according to this, Libra doesn’t plan to obtain any local banking licenses.
Moreover, the Monetary Authority of Singapore recently raised concerns about how the currency will be used and how will it function. The managing director of Monetary Authority of Singapore stressed that the regulators need to understand exactly how Libra is going to work, in order to see the possible benefits of it compared to other electronic payment systems and products.
It was recently reported that India may not accept Libra as a currency of any kind since the country’s regulations prohibit the use of banking network for blockchain currency transactions.
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