Switzerland Softens Tone on Libra After Ex-President Says Project ‘Failed’

Switzerland Softens Tone on Libra After Ex-President Says Project ‘Failed’

  • By Admin
  • February 4, 2020

A government memo, seen by Bloomberg, emphasizes the country's regulators haven't ruled out the likelihood Libra could at some point receive their approval. Swiss officials will still monitor the project, the memo reads, paying special attention to "the form which Libra may absorb the longer term .”

Published Jan. 15, the memo could mean Swiss government wants to melt its stance on Libra and show it recognizes the worth of a world payments solution. “Switzerland is usually hospitable projects that reduce the value of cross-border payment transactions and seek to market financial inclusion,” the govt said.

The news comes weeks after Swiss minister of finance Ueli Maurer, who at the time was also the country's president, surprised industry observers with a blunt statement to Swiss broadcaster SRF on Dec. 27, saying regulators wouldn't approve Libra anytime soon.

Maurer stated Libra won't add its current form because the central banks haven't "accepted" the basket of currencies which will back the stablecoin. “The project, during this form, has thus failed," he said.

Switzerland had initially welcomed the project after the Libra Association said it might establish its headquarters within the country's banking capital of Geneva. As Bloomberg reported at the time, Swiss State Secretariat for International Finance welcomed the move, describing it as “positive sign that Switzerland can play a task in an ambitious international project."

The change may, in part, are a response to international pressure, when regulatory attitudes towards Libra hardened within the months after it had been revealed.

U.S. politicians expressed concerns within the summer that Libra would challenge the U.S. dollar's supremacy and harm users with untried and untested technology. In September, France's minister of finance said Libra would fundamentally challenge countries' monetary sovereignty which development shouldn't be authorized within the European Union .

The Libra Association said in September it planned to use for a license as a payments system within the country. In response, FINMA said the project would likely face strict banking rules on top of tough anti-money laundering controls. FINMA'S CEO later clarified that although Swiss law was non-negotiable, the regulator wasn't "here to form such projects impossible" and would approach the task of regulating Libra with an "open mind."

Although Libra had previously committed to a firm June 2020 launch date, Bertrand Perez, director of the Libra Association, also said in September it might be pushed back by one or two quarters to make sure regulators are "fully comfortable with our solutions."