Facebook’s Libra: A case for capital markets supervision?

Ralph Rirsch and Stefan Tomanek
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Ralph Rirsch: Austrian Financial Market Authority (FMA), Otto-Wagner-Platz 5, Austria
Stefan Tomanek: Austrian Financial Market Authority (FMA), Otto-Wagner-Platz 5, Austria

Journal of Payments Strategy & Systems, 2019, vol. 13, issue 3, 255-267

Abstract: This paper considers some of the seemingly simple questions that people have been asking about Facebook’s Libra, with particular regard to its legal nature. As this paper will show, thanks to the way Libra is structured, it falls under various aspects of European capital markets law. The paper argues that the Libra Association and its resellers will most likely be required to operate properly licensed branch(es) or registered office(s) in the EU. Otherwise, they would not be allowed to market and operate their network on the EU single market. Libra is a complex product combining the functions of traditionally separate product types (namely payment instruments and funds/financial instruments). In this way, it embodies the very risks that capital market regulation seeks to control and mitigate — shrouding these risks in an innovative and exciting technical guise does not change this fact.

Keywords: blockchain; crypto-assets; Libra; Facebook; virtual currencies; capital markets law (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2019
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