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| Swiss president and finance minister Ueli Maurer, pictured September 2019, has called Facebook's planned Libra cryptocurrency a "failed" project (AFP Photo/ Johannes EISELE) |
San Francisco (AFP) - The Swiss president and finance minister has delivered the latest blow to Facebook's planned Libra cryptocurrency, saying it has "failed in its current form," Swiss network SRF reported Friday.
"The
central banks are not going to accept the basket of currencies" that Libra
is supposed to be based on, Ueli Maurer, who is in his final days in the
rotating presidency of the Swiss Confederation, Switzerland's federal council,
told SRF.
Libra, a
high-profile project of social network giant Facebook, is tentatively scheduled
for a 2020 launch but has faced months of severe criticism from some of the
world's most influential financial authorities.
In theory,
Libra will be managed by a Geneva-based independent association linking several
companies and non-profit groups.
But since
early October, the online payment companies PayPal and Stripe, as well as Visa,
Mastercard and others, have withdrawn from the project amid growing pressure
from American and other regulators.
They have
cited the potential for illicit uses of the currency and have underscored the
battered reputation of California-based Facebook in matters of privacy and data
protection.
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French
Finance Minister Bruno Le Maire, pictured October 2019, has expressed
serious
concerns about Facebook's Libra project (AFP Photo/Andrew
CABALLERO-REYNOLDS)
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Loss of 'sovereignty'
Countries
and central banks -- for now the only entities legally permitted to issue
currency -- have also expressed concern about a blow to their sovereignty.
In October,
French Economy Minister Bruno Le Maire bluntly expressed his concerns, saying,
"Libra is not welcome on European soil."
"We
will take steps with the Italians and Germans, because our sovereignty is at
stake," he said, speaking in Washington on the sidelines of the fall
meeting of the World Bank and International Monetary Fund.
Earlier
this month, a US Federal Reserve official expressed American reservations.
"Without
requisite safeguards, stablecoin networks at global scale may put consumers at
risk," Fed Governor Lael Brainard said in a speech in Frankfurt.
Cryptocurrencies
to date have suffered from "staggering" losses due to fraud and
theft, Brainard said.
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Facebook
chairman Mark Zuckerberg, pictured October 2019, has said the Libra
cryptocurrency will not be launched until it receives all needed approvals (AFP
Photo/
MANDEL NGAN)
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'Serious
concerns'
Stablecoins
are a type of cryptocurrency designed to provide stability -- avoiding the wild
swings of bitcoin and other cryptocurrencies -- by being pegged to relatively
stable assets or currencies.
Libra is
designed to make it easy for users of WhatsApp, a Facebook-owned messaging
platform, to instantly send funds to friends or family.
The size of
Facebook -- 2.2 billion people worldwide connect on at least one of its
platforms, which also include Instagram, WhatsApp and Messenger -- would give
it the potential to disrupt the global financial system, making it far harder
for central banks to manage, Fed chairman Jerome Powell told US lawmakers in
July. He expressed "serious concerns."
The Libra
association declined to comment when contacted by AFP.
But in
October, Facebook CEO Mark Zuckerberg testified before a congressional
committee that Libra would not be launched until it received all necessary
authorizations from the authorities.
In response
to regulators' resistance, Zuckerberg last month opened the door to scaling
back plans for Libra if it cannot win the needed approvals.
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