Switzerland's government put the kibosh on hopes for swift approval of cryptocurrency project Libra.

Swiss officials dashed hopes for Libra, a cryptocurrency project championed by Facebook and to be located in Switzerland: «Switzerland cannot grant Libra a permit in its current form,» finance minister Ueli Maurer said at a press conference, according to Swiss daily«Neuen Zuercher Zeitung» (behind paywall, in German).

Libra surprised Swiss officials with plans to set up shop in Geneva as an association – a specific and lightly regulated Swiss legal form. Switzerland has been broadly receptive to the nascent blockchain and crypto industry, while influential policymakers have been critical of Libra specifically.

On Friday, it emerged that Switzerland appears to be deferring to international pressure on Libra, according to the newspaper. Switzerland's central bank and financial regulator Finma had already been warned that Swiss officials could put the kibosh on a quick approval.

Contrasting Tone

The government's reasoning contrasts with comments from Finma head Mark Branson, who said in October that he was far less jittery about Libra than other projects «which perhaps attempt to exploit regulatory loopholes or arbitrage different jurisdictions against one another.» Branson, a former UBS banker, had expressed satisfaction that Libra was being developed «in full public view» and would spark «an intense debate among international regulators.»

The Swiss National Bank is likely to be relieved by Libra's slow-down: a think-tank had argued that the cryptocurrency could deepen the alpine nation's long-held negative interest rate policy because of haven flows, as finews.com reported in July.

Bern Wrong-Footed

Maurer, who currently holds Switzerland's rotating presidency, also expressed concern for the stability and creditworthiness of the banking sector: «Today's banking system is going to be shaken up,» he said, predicting that banks won't be necessary for all financial transactions (a key tenet of Libra's philosophy).

The 69-year-old politician admitted that the development of cryptocurrencies like Libra had wrong-footed officials in the Swiss capital, Bern: «We'll have trouble keeping up,» he said, adding that he hoped new projects would continue to seek out Switzerland as their home base.