After a silent demeanour in the digital asset space since the end of last year, Facebook’s Libra is back with a new announcement in the industry.
On Thursday, Libra’s David Marcus revealed on Twitter that the Libra stablecoin venture would be going forward with a renewed plan of action for its development. The Head of Calibra indicated substantial downgrading of the initial vision, which was supposed to be a permission-less form of governance. Marcus announced that the project will be not moving on to a more ‘market-driven open and competitive network’.
However, the key part which got everyone’s attention is that Libra will not host both a single-currency stable asset and a multi-currency stablecoin. The updated whitepaper of the crypto detailed,
“We are therefore augmenting the Libra network by including singlecurrency stablecoins in addition to ≋LBR, initially starting with some of the currencies in the proposed ≋LBR basket (e.g., LibraUSD or ≋USD, LibraEUR or ≋EUR, LibraGBP or ≋GBP, LibraSGD or ≋SGD),” the paper states.”
The changes have surfaced after Mark Zuckerberg’s last Congress hearing in October, where the Facebook CEO was extensively criticized for bypassing several regulatory approvals for Libra. It can be seen that Facebook and Libra have since gone forward with the development of the project without receiving any regulatory clearance.
However, in order to avoid such criticism again, Marcus indicated that Libra will attain “a comprehensive network-level system around anti-money laundering (AML), combatting the financing of Terrorism (CFT), and sanctions enforcement” and “building stronger protections into the design of the Libra reserve”.
Libra will support Central Bank Digital Currencies
One of the major parts of whitepaper also covered an aspect of serving the CBDC’s and it was mentioned that Libra could act as a platform for these Bank-backed assets. The paper mentioned that Libra is counting on the development that eventually CBDC would be directly integrated with the Libra network, which will also remove the requirement of Libra to control the associated Reserves. The paper added,
“As an example, if a central bank develops a digital representation of the US dollar, euro, or British pound, the Association could replace the applicable single-currency stablecoin with the CBDC.”
Additionally, the white paper also indicated that Libra Association has already started the proceedings by applying for a payment systems license from the Swiss Financial Markets Supervisory Authority (FINMA). To ensure that authorities around the globe are on board with this move, the Swiss agency is operating with a group of regulators from 20 different nations.
Although, a specific time of release was not mentioned, it was indicated that proposed date of launch should be within the next 12-months.
Considering, there hasn’t been any development in terms of the global lock-down coming to an end, it will be interesting to observe Libra over the next few months and understanding its course of action.