At the end of December 2019, Switzerland’s then-president Ueli Maurer described Facebook’s Libra coin as a “failure”, saying that the digital currency wouldn’t have a chance at success in its current form.
However, an internal memo shared with Bloomberg shows that the Swiss government has now indicated that it would be open to working with Facebook to approve the Libra cryptocurrency.
The Swiss Confederation, led by Simonetta Sommaruga since the start of 2020, has noted that it remains open to projects which seek to reduce the costs of cross-border payments and increase financial inclusion.
Maurer had previously painted a bleak outlook for Libra’s future in the Alpine nation, claiming that the project had “failed” in its current form and explaining that regulators and central banks would never accept the basket of currencies backing the digital currency.
It now seems that these sentiments may have been the personal thoughts of Maurer rather than the wider Swiss government as regulators look for new ways to work with the tech giant.
Facebook Global Holdings had chosen Switzerland as a base for its Libra Network operations, registering the project as a blockchain payments firm in Geneva last May.
The project, which could potentially become the largest borderless payments system in the world by virtue of Facebook’s colossal user base, may generate significant employment and commerce opportunities in Geneva.
Bloomberg reported yesterday that despite a fresh look at Libra’s regulatory status, Facebook officials could not say for certain that the digital currency would be launching in 2020, with regulators still largely undecided on the digital currency’s fate.
Regulatory concerns
Libra has faced significant regulatory roadblocks since its inception, drawing the ire of lawmakers, bankers, and governments worldwide – many of whom believe that the project will undermine national monetary sovereignty.
In October, Russian IT minister Dmitry Peskov indicated that Russia would look to ban Facebook’s Libra and Calibra ecosystem if lawmakers in the US also moved to outlaw the currency.
Similarly, former People’s Bank of China governor Zhao Xiaochuan has stated that Libra should be regulated and controlled by the International Monetary Fund (IMF) to make it work in consumers’ best interests.
Representatives from the European Central Bank (ECB) have been equally sceptical of Libra, with one executive calling the project “beguiling but treacherous” and urging Europeans to stick with traditional established payment solutions.
You can read more about Libra’s progress and regulation here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.