Facebook crypto Libra to launch as early as Jan but scaled back

Daniel Fowler
November 27, 2020

Libra, a cryptocurrency project led by social media giant Facebook, has announced its plans to launch a US Dollar-pegged stablecoin in January of 2021. Unfortunately, these suggestions did not appease regulators and the project continued to suffer the regulatory backlash. The developer of a digital wallet designed for Libra digital currencies explained that the wallets were ready but for limited users. By pursuing a stablecoin, effectively a digital payment vehicle, Libra should avoid much of the risk or concern from various regulators.

This sustained pressure and pushback from politicians and regulatory bodies globally, caused the project in March to announced it was to 'rethink' its plan for Libra.

Meanwhile, the report notes that the early 2021 launch will see the initial roll out of a dollar-pegged stablecoin, which is a downgraded version, as against the original announcement of a token pegged to a basket of fiat currencies.

The group also said it no longer intends to move to a fully permissionless system over which no single authority has control, while maintaining the "key economic properties" of a permissionless system. Three people involved with the digital currency project told the financial publication that the Libra Association is planning to add more fiat pegs at a later date after the necessary regulatory and legal compliances.

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The association plans to launch only one coin pegged to the United States dollar, while other currencies will be rolled out later, the sources explained.

Libra Association is seeking the go-ahead from Switzerland's markets watchdog to issue a series of stablecoins backed by individual traditional currencies. Yet as part of the institution's new plan, other coins backed by traditional currencies, as well as the composite, would be introduced at a later date, the FT said.

The Libra Association, the stand-alone group guiding the crypto, has been set up in Switzerland, a Fintech friendly jurisdiction, that is now reviewing Libra's proposal.

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