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Facebook's currency project “failed”, says Swiss finance minister

Several banking companies have withdrawn from the project in the face of anger from the states.

Swiss Finance Minister Ueli Maurer says Facebook's Libra digital currency project “failed in its current form”, according to an interview published Friday December 27 by the Swiss chain SRF. “The central banks will not accept the basket of currencies” on which Libra is supposed to rely, said the one who is also the outgoing president of the Swiss Confederation, a largely symbolic function.

This statement is yet another blow to the social media giant's project, which is supposed to see the light of day in 2020 but has been heavily contested by the authorities for months. Libra will in theory be managed by an independent association made up of Geneva-based companies and non-profit organizations.

PayPal, then Stripe (as well as Visa, Mastercard and others) withdrew from the project, under increasing pressure from American and foreign regulators. They are indeed worried about potential malicious uses of the currency, and point to the bad reputation of the Californian internet giant in terms of confidentiality and protection of personal data. States and central banks also fear losing their sovereignty: they are for the moment the only ones to have the right to mint money.

The size of Facebook – with around 2.2 billion people connecting to at least one of its platforms (Instagram, WhatsApp, Messenger, Facebook) every day – implies that the new currency could disrupt the global financial system and render the toughest job for central banks, the Fed president had already observed a few months ago. In October, Facebook boss Mark Zuckerberg reiterated that Libra would not be launched until after it had all the lights necessary green regulators.

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