Facebook digital currency Libra will be launched as soon as January next year
According to reports, three people familiar with the matter revealed that the digital currency Libra initiated by Facebook is planned to be launched as early as January next year, but the actual Libra version range will be more limited than previously expected.
Libra’s initial plan was to launch a basket of currency-backed synthetic tokens, but this move caused concerns from regulators. Therefore, in April of this year, the Libra Association adjusted its initial plan, stating that it plans to launch digital versions of several currencies and a “digital composite version” of all tokens.
However, one of the people familiar with the matter said that this time the association will only issue a single token backed by the US dollar. The person familiar with the matter added that other currencies and synthetic versions will be launched at a later stage.
The three people familiar with the matter said that the specific launch time of Libra depends on when the Swiss Financial Market Supervision Authority (Finma) approves the project as a payment service, but the fastest may be in January. The Swiss Financial Market Supervisory Authority responded that it would not comment on Libra’s application. The application was originally submitted in May.
The Libra project was first proposed in June 2019. As the project has been questioned by regulators around the world, the vision of the Libra project has been repeatedly downgraded. Regulators worry that Libra will threaten the stability of the currency and become a money laundering tool.
Although reducing the scope of Libra may please vigilant regulators, critics complain that tokens backed by a single currency may allow users to pay additional costs when switching currencies, thus allowing the project to “achieve wider financial penetration”. “The name is not true.
The Libra project was originally proposed by Facebook executives. But the birth of Libra was full of twists and turns. At the end of 2019 and early 2020, the founding members of the project (including PayPal, MasterCard, Vodafone and eBay, etc.) have withdrawn one after another and deliberately kept their distance from this controversial project.
Then, the Libra Association announced in April that it will completely adjust the project vision to address the concerns of regulators; at the same time, it will reduce the scope of the project and promise to take additional measures to manage the system to prevent abuse.
The Libra project has also been questioned by the outside world because of the privacy scandal faced by Facebook itself. However, several Libra members said that in May this year, the association appointed HSBC Legal Director and former government official in charge of terrorism financing, Stuart Levey, as the first CEO of the association, marking an important part of the project. The turning point is to strive to be independent of Facebook.
Since then, some members have rushed to develop and test their own products, so that when the digital currency network is actually online, they can release products on the network in time. One of these projects is Facebook’s Novi (formerly Calibra), a digital wallet that allows Facebook users to hold Libra.
A person familiar with Novi said that the wallet is “ready from a product point of view” but will not be launched anywhere at this time. According to the person familiar with the matter, Novi needs to obtain licenses in various states in the United States. Novi has obtained permits from multiple states, but is still waiting for permits from “up to ten states (including New York)”.
It is not clear how the main members of the association (such as Uber and Spotify) will use the currency. Some members revealed that they will observe the market reaction after the release of Libra, and then consider investment in use cases.
At the same time, with the rising interest of professional investors and central banks in digital currencies and the accelerated transformation of cash payments to digital payments by the epidemic, Bitcoin rose to a historical high of close to $20,000 this week. In addition, PayPal, the first founding member to withdraw from the Libra project, announced last month that it would support cryptocurrency. The CEO of PayPal also said that the digital transformation of currencies is “inevitable”.
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