Posted 2 years ago | by Ben Armstrong
Facebook Changes its Plans for Libra
Facebook may be modifying its plan for releasing Libra in 2020. The company-controlled token has been controversial, and has caused concern in the US government.
The Libra project was introduced last year, and social media giant Facebook claimed the cryptocurrency would be a simple global currency. It would also have the power to transform the global economy. Regulators then quickly took notice and realized that the company had to answer some questions about what the digital currency would be.
While Libra does seem to be on track for a Q4 rollout, the platform will offer government-issued currencies, such as dollars and euros, to support its token. This appears to be a way to appease reluctant regulators and gain additional support for the plan.
Bloomberg reported that both crypto and stated-issued currencies will be available on the company’s digital wallet, Calibra.
Libra Still Looks Like an Odd One
Facebook is hoping to release both Calibra and Libra at the same time in October by redesigning the digital wallet and scaling back the features of the cryptocurrency. Calibra will allow users to send and receive money, including fiat currency, and make purchases.
As a social media platform, Facebook has been able to attract two billion users all over the world.
The expansion of the currency basket by including central bank currencies makes it possible for anyone to use Calibra as a more traditional payment system. Anyone with Facebook Messenger or WhatsApp installed on their mobile device could send funds across the globe with the tap of a button.
A New Monopoly
When Facebook introduced Libra as a way to bypass the global financial system entirely, the lawmakers and regulators questioned its ambitious plan, and had concerns about the risks. Many questions have been not yet answered.
Officials in the United States suggested Facebook add existing cryptocurrencies, such as Bitcoin, to Calibra wallet, instead of developing its own. Also, there are other suggestions, including allowing stablecoins into the basket of the digital wallet to prevent it from undermining the sovereignty of central bank fiat currencies.
Lawmakers in Germany and France strongly opposed accepting the cryptocurrency into the EU. However, on the other hand, Switzerland was one of the few open to international cooperation with The Libra Association and claimed the currency “fits perfectly into our regulatory framework.”
Following the Libra project, several countries, including Japan, China, and England, have explored minting a digital currency. Although Libra does appear to be on-track, it remains to be seen if the public will adopt the new platform. It is unlikely to gain much support from the crypto community.