- Aug. 11, 2019
-- Facebook has 'let it be known' in the USA to a House Financial Committee, that it has selected the Swiss Financial Markets Supervisory Authority (FINMA) to be Libra's regulator. It stated that the Swiss were "best prepared to oversee the global market for digital currencies and privacy".
This in itself shows a great naiveté on behalf of Facebook OR some extreme gall.
The currency will seemingly replace various fiat currencies in the jurisdictions in which it acquires customers. In the UK: the FCA (Financial Conduct Authority) has in recent days published its findings on its Digital Currency consultation in the form of its Guidance on Cryptocurrency (CP19/22). This makes it very clear that such currencies, if offered to customers in the UK, then the currency will be governed by UK legislation and will fall into the UK perimeter for FCA regulation.
This means that to operate and supply services (Libra) to people in the UK, then it must have a UK FCA licence; and must comply with UK legislation and regulations, even if some of these happen to be have common or shared laws with the EU.
Accordingly, this then means that Facebook et. al. are being either a) Extremely naive or b) Very 'gung-ho'. In either case, we should be worried.
If they are being naive, and if they have not understood the FCA guidance and the UK regulations then perhaps we should be very concerned, as this may be an example of companies, such as Facebook, disregarding what their lawyers ought to be telling them. Or maybe they are doing this, in spite of what the lawyers say. Either way this does not appear professional, nor a company / consortium in which we should trust to manage our highly-regulated payment systems if they simply ignore the regulations.
Facebook et.al ***may*** however, have even made a commercial decision (the 'gung-ho' position) to 'press ahead' with a 'minimum viable product to disrupt the market' and to then argue their position as having been a sensible alternative route not requiring the same regulations;
i.e. when things go wrong and when the prosecutions arrive. They may have decided even, that the legal process involved in pursuing them might take long enough to start, for them to be impossible to stop by this time, so as to decide now to worry about the whole 'consequences' problem later. Maybe they also think that this worked for them for Facebook data protection law issues (remember the Cambridge Analytics case and Data Protection fine in the UK for £5billion last month) or for their tax jurisdiction selection.
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