Facebook’s Libra project is now turning into several fiat currency stable coins from different countries. The company is changing plans and also proposes to secure digital currencies from central banks (CDBC).
The giant of social networks, Facebook changes the original plans of the crypto project lb to create a global currency. In a recent announcement Facebook and her partners said they are now planning to publish several Stable coins supported by various fiat currencies.
The Libra AssociationThe group of companies overseeing the project has redesigned the project White paper of lb in response to concerns from financial regulators that efforts could undermine central bank power and control.
The new social networking plan confirms the rumors that surfaced in March. As reported DailyBitcoinafter strong regulatory pressure Facebook planned to take a more open approach to currency hedging Fiat digital and Stable coins.
Several stable coins backed by fiat currencies
In a change in the technical document (White paper) of the crypto project, the association referred to the controversy caused by regulators around the world lb. With this in mind, he pointed out that the initiative’s intent was not to compete with countries’ monetary sovereignty and that they were working to clear the terrain.
While our vision has always been that the Libra network complements and does not compete with fiat currencies, the possibility that the multi-currency pound (BRLBR) would affect sovereignty and monetary policy has been a fundamental concern of the network to a significant extent and a large volume of domestic payments were made in ≋LBR. For this reason, we are expanding the Libra network by including stable coins in a currency in addition to ≋LBR.
The representative on his part Facebook and responsible for CalibrateDavid Marcus reported the change in plans in one Thread of Tweets. Marcus mentioned that this is one of the most remarkable developments in the project “On Facebook We are expanding the Libra network with unique coin-stable coins [fiat] in addition to the scales“” The project now plans to include government assets such as the British pound, the euro, the US dollar and the Singapore dollar.
The new restructuring could also help lb to win new partner companies. For regulatory and security reasons, some of the original project partners have withdrawn from the association, including visa, Mastercard y PayPal. Today the group, which was founded last year with 22 members, continues to take shape.
Libra: a platform for CBDCs
Other notable reforms indicated by the new ones White paper of lb It is the suggestion that the project could eventually serve as the central bank’s platform for digital currencies (CBDC). With the recent boom in digital currency initiatives by several central banks around the world, this strategy could change governments’ views on the Libra and see them as allies.
According to the modified document:
In addition, we expect that central banks can be directly integrated into the Libra network when developing CBDCs, so Libra Networks no longer has to manage the associated reserves, reducing credit and custody risk. For example, if a central bank developed a digital representation of the US dollar, euro, or pound sterling, the association could replace the fiat currency stablecoin with the CBDC..
In addition, the association proposed that over time, as CDBC developments continue, lb It could effectively be a backup platform for these innovations:
Indeed, the expectation that the Libra payment system can be updated to support these public sector innovations is a design principle that we would like to fulfill when the Central Bank’s digital currency perspective (CBDC) becomes a reality..
Facebook changes plans: several Stable coins
The project by Facebook also seems to change the focus of a network Blockchain decentralized. According to Marcus, one of the plans “”Replace the originally planned transition to a license-free form of government to a competitive and open market-oriented network“”
Was originally lb was sold as a project in the Facebook it would not control infrastructure or currency spending. Among the attempts at decentralization is the source code of Calibrate It should be open source so everyone could build a wallet.
According to the updated document, lb will stay as “Open source“But the calls”Wallets not hosted“Will be”subject to controls, including transaction and current account limits, that are applied along with other controls by the protocol“” In other words, to build on the network of lb Various licenses and the prior approval of the association are required.
For some critics lb You will get rid of some of the features that initially made the project unique. Likewise, the rigorous identification measures that the platform now requires make it a financial solution such as: PayPal. That was that enthusiastic opinion of Bitcoin, Udi Werthiemerwho commented the “The Libra became a Venmo clone“, The mobile payment service from PayPal.
Anti-money laundering regulations and guidelines
In this sense, the new Libra modifications also mean that it is now “a comprehensive network-level system for combating money laundering (AML), combating terrorist financing (CFT) and applying sanctions“” A measure that enables you “protect“Better for users, according to the document.
The Libra Association has also taken note of regulatory approvals for operability. The project stated that it had started receiving a license for payment systems from the Swiss Financial Market Supervisory Authority (FINMA).
The licensing process has been and is supported by central banks and other financial regulators, regulators, and enforcement agencies around the world that have joined together as part of the FINMA School of Regulators.
But will it be enough?
While the new strategy of Facebook by adding a wide portfolio of Staleblecoins supported by the sovereign currencies of different countries trying to control the concerns that lb it could affect monetary policy and the local economy; Changing the plans does not yet secure the project a certain future.
For Sylvia Garcia, As a member of the United States House of Representatives, the new game plan does not solve the problems previously raised. Apparently from American politics quoted by the media Crypto-political, Facebook has not yet answered how to renew lb This will affect the global monetary system and users.
Garcia stressed that the Libra Association decided not to “non-partisan concernsThat was addressed in Congress last year. With this in mind, he noted that the social networking project continues to be a “political obstacleRegardless of the renovation.
Stable currencies are very popular worldwide, which does not go unnoticed by regulators.
The new reform of the White paper of lb to support several Stable coins It comes shortly after the G20 publishes a report on the risks associated with stable coins. The G20 Financial Stability Board (FSB) outlined some regulatory recommendations in the report that governments of all nations need to consider.
Sources: TheBlock, Bloomberg, Decrypt, Crypto-political
Hannah Estefanía Pérez ‘version / DailyBitcoin
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