Facebook’s initiative to create an accessible, frictionless, globally-available cryptocurrency and payments network is brushing up against unprecedented regulatory hurdles, at least according to a new report from Reuters. Though the social media company is taking steps to comply with watchdogs around the world, many experts are concerned that it won’t be enough.

Facebook’s path forward will involve careful orchestration with central banks, financial overseers, and enforcement officers around the world. This administrative tightrope-walk may involve “literally hundreds, perhaps thousands, of licenses from hundreds of different regulators,” said Sean Park, Founder and Chief Investment Officer at Anthemis, a venture capital company that invests in the crypto industry.

So far, Calibra, a Facebook subsidiary that will develop a wallet and financial services for the Facebook ecosystem, has registered as a money services business with the U.S. Financial Crimes and Enforcement Network (FinCEN), applied for money-transfer licenses in the United States, and began the process to obtain a BitLicense from New York’s Department of Financial Services.

The company has also reportedly spoken with authorities at Britain’s Financial Conduct Authority, the Bank of England, and Switzerland’s financial regulator, FINMA.

Additionally, the Russian Ministry of Finance said Libra will be treated in Russia like any other digital asset, with forthcoming regulations expected. A similar sentiment was expressed by Swiss Regulators.

Local scrutiny

Despite these steps toward compliance, Facebook “will not get a free pass anywhere,” said Park.

Authorities in Europe, United States, and India promised a close look at the social media company’s proposal, immediately after it launched. Singapore’s Central Bank said it requires more information about the project and the announcement spurred G7 members to rethink how it organizes its cryptocurrency task force.

Libra was put forward at a time when Facebook is already facing public and governmental scrutiny for its outsized influence and questionable privacy policies. Or as Barry Lynn, executive director of Open Markets Institute put it: “This is a corporation that’s got fires all over the world with regulators. It’s only going to get worse.”

While Libra is not exclusively Facebook’s project, being overseen by a consortium of corporate and non-governmental investors based in Geneva called the Libra Association, the currency itself faces existential challenges.

The Bank for International Settlements and the International Organization of Securities Commissions are expected to place deep restrictions on the global applicability of the tender. And last week Randal Quarles, chair of the Financial Stability Board, called for closer scrutiny of retail payments using cryptocurrencies.

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

Libra plans to reinvest customer deposits in government bonds and currencies to create a reserve that will stabilize Libra’s price. A Facebook representative told Reuters that these reserves would follow the monetary policies of the source countries. He added, that Libra is not planning to acquire local banking licenses.

It is unknown the total costs of applying for the right to operate seamlessly across the world, irrespective of local laws. The company will need to arrange compliance networks, monitor for money laundering, tax evasion, and fraud, appease consumer protection watchdogs, and establish KYC protocols for every country it intends to operate in.

“I would say the risks are commensurate with the returns – potentially huge,” Pascal Bouvier, managing partner at MiddleGame Ventures, a financial technology venture capital firm, told Reuters.

Given the anti-trust roadblocks Facebook is already facing, as well as the challenges of attempting to disrupt global finance with system’s planned launch in 2020, at least one analyst is predicting Facebook hasn’t fully considered their position.

“A year is enough time to meet with regulators, figure out where the real trouble spots are and potentially scale it back to something narrower,” Jeff Bandman, a former U.S. Commodities Futures Trading Commission official turned fintech regulatory consultant at Bandman Advisors, said.

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