Following a lot of back and forth by Facebook on its cryptocurrency, Libra, the company has declared the digital currency will be launched in January 2021. As per the reports, three anonymous officials engaged in the project have revealed this information and mentioned that it will be a single digital coin supported by the dollar. Further, the Geneva-based Libra association will be issuing and regulating Libra.
This disclosure suggests that tough governing circumstances have been placed for Facebook’s preliminary launch of its digital currency, which was previously planned to be used as a stablecoin and be backed by the basket of fiats.
Due to political and regulatory backlash, Facebook had to scale down the project. At that point in time, concerns by central banks were raised worldwide, expressing that the issuance of digital currency will cause financial instability and create challenges for traditional money.
The Libra association
Including Facebook, there were 27 members supporting the Libra association. Several notable projects stepped back from assisting this project, including eBay, Vodafone, PayPal, and Mastercard.
The Libra association has now sought permission from the Swiss market watchdog to launch a range of stablecoins backed by individual fiats alongside a token based on the currency-pegged stablecoins.
Although the association plans are intricate, the digital coins supported by conventional currencies including the composite will be postponed to a future date.
The regulators’ were skeptical about this project that was introduced in 2019. The skepticism pressurized Mark Zuckerberg, the CEO of Facebook to testify in front of the U.S. Congress over Libra. Earlier, several countries had rejected the plan of Libra because of its threat to financial stability and usage as a tool for money laundering.
Facebook tapered its plans to satisfy the regulators, though, it was asserted by many people that it was against the objective of launching Libra, i.e. financial inclusion. Nevertheless, the association ensured that additional measures will be put in place to conform to regulations and govern its system for misuse.
Facebook Depicting the Crypto as an Independent Entity
Further, the project saw a turning point when HSBC legal chief and former George W Bush-era terrorism finance tsar Stuart Levey was appointed in May as its first chief executive. Once more, this was beneficial to depict Libra Association as an autonomous organization, separate from Facebook.
It would be intriguing to see the impact on the market, with now Libra Streamlining its plan. Though regulators are still watchful of the former founding member, PayPal, who earlier declared support for cryptocurrencies. Time will tell if it will support the crypto when it is launched.