Facebook's Libra Has 'failed' In Its Current Form: Swiss Finance Minister

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Facebook 's Libra has 'failed' in its current form said Swiss Finance Minister and President Ueli Maurer. The Central Bank will not accept the currency he said.

Written By Tanima Ray | Mumbai | Updated On:
Facebook 's Libra has 'failed' in its current form: Swiss Finance Minister

A Swiss Network reported on December 27 that the Swiss president and finance minister objected to Facebook's planned Libra cryptocurrency, saying it has "failed in its current form". President Ueli Maurer told the network that the Swiss Central banks are not going to accept the basket of currencies that Libra is supposed to be based on. Meanwhile, Facebook plans to launch it's very first cryptocurrency Libra in 2020 amidst severe criticism from some of the world's most influential financial authorities. As per reports, the cryptocurrency will be managed by a Geneva-based independent association linking several companies and non-profit groups.

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Doubts over Facebook's Libra

Amid growing dissent and pressure from American and other regulators, online payment companies PayPal and Stripe, as well as Visa, Mastercard, and others, have withdrawn from the project since early October. The reason behind the doubts is the illicit uses of the currency and the battered reputation of Facebook in matters of privacy and data protection. There is also a matter of sovereignty that bothers the countries and central banks -- for now, the only entities legally permitted to issue currency.

While speaking in Washington on the sidelines of the fall meeting of the World Bank and International Monetary Fund, French Economy Minister Bruno Le Maire in October also showed his denial and told that Libra is not welcome in European soil. The same was reiterated by Fed Governor Lael Brainard said in a speech in Frankfurt who claimed that without requisite safeguards, stable coin networks at a global scale may put consumers at risk. He added that cryptocurrencies to date have suffered from staggering losses due to fraud and theft.

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Facebook to stall Libra till it gets clearances

Facebook is into stablecoins - a type of cryptocurrency designed to provide stability - avoiding the wild swings of bitcoin and other cryptocurrencies - by being attached to relatively stable assets or currencies. The social media giant so has planned to launch Libra to make it easy for users of WhatsApp, a Facebook-owned messaging platform, to instantly send funds to friends or family. Fed Chairman Jerome Powell told US lawmakers in July that the widespread reach of Facebook with 2.2 billion users 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. Later Facebook CEO Mark Zuckerberg in October testified before a congressional committee that Libra would not be launched until it received all necessary authorizations from the authorities.

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