The President of Switzerland has stated that Facebook’s controversial cryptocurrency project has failed in its current form and needs reworking to be approved.
In an interview with Swiss broadcaster Schweizer Radio und Fernsehen (SRF), President Ulrich Maurer stated that Libra does not have a chance of being successful “because the basket of currencies that is deposited in this currency is not accepted by the national (central) banks.”
“The project in this form has actually failed,” Maurer added.
The existing plans for the digital currency, which is to be governed by the Switzerland-based Libra Association, has so far faced opposition from central banks, with its use of blockchain and cryptocurrency being questioned, along with privacy concerns and its potential to scale and thus influence monetary policy and change the global economy.
Some of the key people within the project, including David A Marcus, who is currently President of Messaging Products at Facebook have noted that regulatory hurdles could impact the planned launch date for the cryptocurrency beyond the planned June 2020 date.
Responses have come from many leading politicians and bankers, including Mark Carney, the outgoing governor of the Bank of England, who whilst being open minded about new technologies reinforced his belief that “anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation”.
Jerome Powell, the Chair of the Federal Reserve, went further and stated before Congress on the 10th July that the Fed had “serious concerns” as to how Libra would deal with “money laundering, consumer protection and financial stability.”
President Trump, stated in a Tweet that “If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.”
Libra is to be backed by a reserve of assets such as bank deposits and government debt held by a network of custodians. That backing is an attempt to avoid the price swings that plague existing cryptocurrencies.