You may have heard - there's a European summit next week.

I don't want to overstate the matter, but it's kind of a big deal. As one French minister put it recently, the "sovereignty of countries is at stake". So is the future of an ambitious dream - although many would call it a nightmare.

Image: The Libra Association Council will convene next week

As so often in these polarised times, there's precious little middle ground between the two camps.

To make matters more complicated, a crucial player has just gone back on an agreement to take part. Will this be the day the whole project collapses? Or the moment it finally gathers momentum, even in the face of bitter opposition?


I am talking, as you've no doubt guessed, about the Libra Association Council.

The body convened by Facebook to oversee its plan for a global cryptocurrency is holding its first meeting on 14 October in Geneva, Switzerland - and, while it's too early to call the summit "do or die", it's looking increasingly critical.

Less than six months after it was announced, the initiative has run into difficulties, after payments firm PayPal pulled out of the 28-firm Association, becoming the first of the blue-chip finance and tech member companies to withdraw its support.

The way the news came out made it seem like the corporate version of a break-up. Late last Friday night, in the hours when news goes to die, PayPal released a brief statement saying it had decided to pull out "to continue to focus on advancing our existing mission". (Translation: "It's not you, it's me").

The Libra Association responded by saying that "change is hard," adding later, "We're better off knowing about this lack of commitment now, rather than later." (Translation: "You were never good enough for me, I'm happier alone.")

Image: Paypal pulled support for the currency

Of course, both sides insisted they'd stay friends, but no-one who knew the couple was truly surprised, because they'd seemed such an odd match in the first place.

With Libra, Facebook promised to get around banks and payment providers… and PayPal is a payments provider.

So are Mastercard and Visa, who are also reported to be considering withdrawing, according to the Wall Street Journal, as is digital payment processor Stripe.

The conflict between these companies and the aims of Libra is nothing new. What's brought this issue to a head is the hostile attitude of regulators and politicians. Donald Trump said he was "not a fan".

The US Congress asked Facebook to "immediately cease implementation plans" in order to give regulators time to consider.

Until now, digital technology has always been regulated retrospectively - this would be a sign that governments are prepared to act before an innovation even comes into being.

France and Germany went one further, announcing last month that they would block Libra if it came into operation.

One concern is that Libra might be used for anonymous money-laundering. Another opposite worry is that it would intrude too intensely on users' privacy.

Yet the fear for regulators and finance ministry is as much existential as technical. Simply put, they look at Libra and see a corporation taking the powers of the state.

The French and German governments put it bluntly. In a joint statement released in September, the two countries declared that "no private entity can claim monetary power, which is inherent to the sovereignty of nations". It is almost as if Facebook had proposed to recruit a private army.

Not every regulator is so hostile. Mark Carney, the governor of the Bank of England, initially said he would approach Libra "with an open mind".

Image: Mark Carney said his mind is open but the door is not when it came to the currency

But, he added, "not an open door" - and he has since laid out tough conditions for its acceptance, saying it would have to meet "the highest standards of resilience" before it was accepted as a currency in the UK.

With opposition on this scale, it seems reasonable to doubt whether Libra will ever see the light of day. If that is the case, it will be a remarkable moment.

Until now, digital technology has always been regulated retrospectively. This would be a sign that governments are prepared to act before an innovation even comes into being.

Facebook branches into banking

That determination and foresight is welcome. Yet, amid the conflict and speculation, it's easy to forget why a currency such as Libra could be so beneficial, from lower fees to faster transactions.

Set aside the problems caused by Facebook's involvement and a global digital currency begins to look attractive. Make it collectively owned - if not a truly decentralised way, like Bitcoin, then by governments across the world - and it looks like a financial revolution.

Yet, if anything, Facebook's struggles make that prospect seem further away than ever.

:: Listen to the New Lines podcast on Apple podcasts, Google Podcasts, Spotify, Spreaker

If one of the richest, most powerful companies on earth can't make headway with a relatively conservative proposal, then who can?

One possible candidate is governments themselves. Several are working on so-called "national cryptocurrencies", Switzerland and China.

But although these efforts could bring about great operational efficiencies, they are unlikely to change the financial system - and if they did, the US would most likely step in to stop them.

Image: Facebook were asked to stop plans for the currency by the US congress

Any currency that threatens the dominance of the dollar will be treated as a threat to the national interest of the US.

That makes it very unlikely to happen.

Perhaps the lesson here is not that it would be remarkable if Facebook was stopped from building Libra, but the reverse. The birth of the internet was an amazing moment when innovation could flourish without permission.

The Libra summit next week will no doubt tell us differently, but it's hard not to feel that, for better and worse, that era is drawing to a close.

Sky Views is a series of comment pieces by Sky News editors and correspondents, published every morning.

Previously on Sky Views: Beth Rigby - MPs must stop playing politics with no-deal