The president of Switzerland, Ueli Maurer, said Facebook’s proposed cryptocurrency Libra cannot exist in its current form and will need to be altered if it’s going to be able to work as a viable currency, according to a report by Reuters.
The Libra project is currently seeking regulatory consent in the country, and it has been scrutinized by other regulators around the world, with some countries like Germany and France flat out saying they will not allow it.
“I don’t think [Libra has a chance in its current form] because central banks will not accept the basket of currencies underpinning it,” said Maurer, who is also Switzerland’s finance minister. “The project, in this form, has thus failed.”
The plan was for the coin to be issued and regulated by the Libra Association, a conglomeration of organizations and companies, although some have left in recent months.
The potential regulatory issues could postpone the planned release date of June, according to Libra co-creator David Marcus. Libra is meant to be backed up by bank deposits and government debt, and held by a group of custodians, an agreement meant to keep the price steady and avoid some of the value swings that other currencies get subjected to on a regular basis.
Earlier this month, European Union finance ministers came to an agreement that digital currencies like Facebook’s Libra have no place in the EU unless the consequences and pitfalls are adequately sorted out.
“No global stablecoin arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed,” the ministers said.
The EU and the European Commission also said they were ready to “take all necessary measures to ensure appropriate standards of consumer protection and orderly monetary financial conditions.”
EU rules could be considered to regulate digital currency, something the EU commission is already tackling, said EU finance commissioner Valdis Dombrovskis.