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Facebook’s Libra cryptocurrency ‘has failed’ says Swiss finance minister

Governments are worried about Libra’s impact on their sovereignty (Picture: Getty Images)
Switzerland’s finance minister says Facebook’s Bitcoin-style currency needs a lot of reworking if it’s going to get off the ground.

Ueli Maurer said central banks are ‘not going to accept the basket of currencies’ to which Libra would be pegged, claiming it has ‘failed in its current form’.

The cryptocurrency is due to launch next year but has faced months of severe criticism from authorities across the world.

Libra is meant to be managed by a Geneva-based independent association linking several companies and non-profit groups.

But since early October, PayPal, Stripe, Visa and Mastercard and other payment services have withdrawn from the project amid growing pressure from regulators.

Facebook CEO Mark Zuckerberg said Libra wouldn’t be launched until authorities approve it (Picture: AFP/Getty)
Officials in the US and elsewhere are concerned about the potential for illicit uses of the currency ..

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ANKARA, TURKEY - JULY 12: Screens of a smart phone and a laptop display the logos of Libra and Facebook in Ankara, Turkey on July 12, 2019. (Photo by Aytac Unal/Anadolu Agency/Getty Images)
Governments are worried about Libra’s impact on their sovereignty (Picture: Getty Images)

Switzerland’s finance minister says Facebook’s Bitcoin-style currency needs a lot of reworking if it’s going to get off the ground.

Ueli Maurer said central banks are ‘not going to accept the basket of currencies’ to which Libra would be pegged, claiming it has ‘failed in its current form’.

The cryptocurrency is due to launch next year but has faced months of severe criticism from authorities across the world.


Libra is meant to be managed by a Geneva-based independent association linking several companies and non-profit groups.

But since early October, PayPal, Stripe, Visa and Mastercard and other payment services have withdrawn from the project amid growing pressure from regulators.

(FILES) In this file photo taken on May 1, 2018 Facebook CEO Mark Zuckerberg speaks during the annual F8 summit at the San Jose McEnery Convention Center in San Jose, California. - Facebook is leaping into the world of cryptocurrency with its own digital money, designed to let people save, send or spend money as easily as firing off text messages."Libra" -- described as "a new global currency" -- was unveiled June 18, 2019 in a new initiative in payments for the world's biggest social network with the potential to bring crypto-money out of the shadows and into the mainstream. Facebook and an array of partners released a prototype of Libra as an open source code to be used by developers interested in weaving it into apps, services or businesses ahead of a rollout as global digital money next year. (Photo by JOSH EDELSON / AFP)JOSH EDELSON/AFP/Getty Images
Facebook CEO Mark Zuckerberg said Libra wouldn’t be launched until authorities approve it (Picture: AFP/Getty)

Officials in the US and elsewhere are concerned about the potential for illicit uses of the currency and Facebook’s battered reputation for privacy and data protection following the Cambridge Analytical scandal.

Governments and central banks, the only entitles legally permitted to issue currency, are also worried about how Libra will affect their sovereignty.

Although cryptocurrencies like Bitcoin are legal in many places and are not dished out by states or banks, they are completely decentralised and are not dished out by any authorities.

But Facebook and the Libra Association – which would act similarly to a central bank – would have a great deal of control over the supply and usage of its currency.

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In October, French Economy Minister Bruno Le Maire didn’t mince his words when he said Libra ‘is not welcome on European soil’.

Speaking in Washington on the sidelines of the World Bank and International Monetary Fund autumn meeting, he added: ‘We will take steps with the Italians and Germans, because our sovereignty is at stake.’

Adtech and cryptocurrency professional Jon Walsh told Metro.co.uk: ‘Libra was never going to have an easy journey.

‘Shifting society to trust a corporate money over governmental money is fairly seismic, but Facebook have the network to pull it off, which may be very scary to governments and central banks.

‘I’m not sure what changes Libra would be able to make that would satisfy the majority of these institutions, so whether we will ever see a launch may well be in question.

FILE PHOTO: Small toy figures are seen on representations of virtual currency in front of the Libra logo in this illustration picture, June 21, 2019. REUTERS/Dado Ruvic/File Photo/File Photo
Regulators worry consumers could be put at risk or that Libra could be used illegally (Picture: Reuters)

‘Facebook may in the future consider building on Bitcoin and which has already proven itself to be hard to attack by governments.’

Earlier this month, a US Federal Reserve official Lael Brainard said ‘without requisite safeguards’ a stablecoin network like Libra ‘may put consumers at risk’.

Stablecoins are designed to provide stability by pinning them to relatively stable assets or currencies.

Libra is designed so people using WhatsApp, which is owned by Facebook, or the social media giant’s Messenger app, can send funds instantly to friends and family.

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Across the world 2.2 billion people use at least one of the company’s platforms, which also include Instagram.

US Fed chairman Jerome Powell said this could have the potential to disrupt the global financial system and make it much harder for central banks to manage economies.

The Libra Association did not immediately respond for comment.

But in October, Facebook CEO Mark Zuckerberg testified before a congressional committee that Libra would not be launched until it received all necessary authorisations from the authorities.

Last month he opened the door to scaling back plans for the currency if it cannot win all necessary approvals from regulators.

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