Libra rewrote its stablecoin plan and entered Swiss licensing

The Libra Association substantially recast its proposed digital-currency system on April 16, 2020, adding stablecoins tied to individual sovereign currencies and beginning a formal payment-system licensing process in Switzerland. The changes represented a retreat from elements of the original plan that had drawn sustained objections from central banks, lawmakers and financial regulators.

The Swiss Financial Market Supervisory Authority, FINMA, confirmed that it had received an application from the Geneva-based association under Switzerland’s Financial Market Infrastructure Act. FINMA said the submission was not complete in every particular but was sufficient to start formal review. The regulator left both the outcome and duration of that process open.

A different monetary design

The association’s revised White Paper v2.0 proposed single-currency stablecoins initially associated with the U.S. dollar, euro, British pound and Singapore dollar. Each was intended to be backed by reserve assets denominated in its reference currency.

The multi-currency Libra token, identified as ≋LBR, remained in the design, but its proposed construction changed. Rather than being backed directly by a separate basket of bank deposits and government securities, it would operate as a digital composite of available single-currency Libra stablecoins. The association presented that structure as a response to concerns that a widely used private basket currency could interfere with monetary sovereignty or domestic monetary policy.

The document also abandoned the original ambition to move the network toward permissionless participation. Validators would remain subject to association approval, while entry into governance and core network services would occur through a competitive process among qualifying organizations. This was a meaningful architectural concession: regulatory control and identifiable participants took precedence over the earlier decentralization roadmap.

A strengthened compliance framework divided network participants into categories that included designated dealers, regulated virtual-asset service providers, association-certified service providers and unhosted wallets. Access, balances or transaction activity could be limited according to participant type. These were proposed controls, not evidence that the network was operational or that its safeguards had been tested.

Licensing became the immediate test

FINMA said it would examine whether Libra could meet national and international standards for payment infrastructure and anti-money-laundering controls. It also warned that bank-like services could produce additional requirements. Because the project was designed for international reach, FINMA reported coordinating with the Swiss National Bank and more than 20 other supervisory authorities and central banks.

That cross-border scrutiny was not incidental. On April 14, 2020, the Financial Stability Board had issued a consultation containing 10 proposed recommendations for global stablecoin arrangements. Its approach emphasized comprehensive oversight, cooperation across jurisdictions and regulation based on functions and risks rather than the technology used. Libra’s revision therefore arrived while international authorities were actively defining the standards against which such a system might be assessed.

Why the revision mattered

Libra had made the regulatory perimeter part of its protocol design. The April 16 documents showed that questions about reserve composition, monetary sovereignty, participant identification and supervisory access could alter not merely a project’s compliance paperwork but its assets, governance and network architecture.

The development did not constitute a Swiss license, authorization to operate elsewhere or the launch of any Libra token. It also did not establish reserve sufficiency, user demand, transaction capacity or consumer protection in practice. What was verifiable on April 16, 2020 was narrower but consequential: the association had replaced major elements of its original proposal, and a national regulator had opened a formal licensing review without predicting approval.