While the whole world is dealing with pandemic, Facebook, or its subsidiary Calibra, which is the one behind issuing Libra cryptocurrency, reworked quietly the white paper for Libra.
Facebook and its own digital currency
If it does not sound a bell, the point is that Facebook has come up with a plan for its own cryptocurrency, which would have a Facebook base of 1.7 billion potential users around the whole world. This, of course, has awakened most state regulators, led by the US, from the lethargy. They decided that they could not allow for such a competition and banned Libra in its original form, and countries such as France and Germany joined.
Problems with regulators
Facebook representatives, led by its founder Mark Zuckerberg, have tried to convince US regulators that their primary goal is to ensure the availability of financial services, especially to those who do not have access to conventional banking services, but even Zuck himself has failed.
Libra’s original, more ambitious plan envisaged a new global digital currency linked to a basket of fiat currencies from different countries. This was one of the main reasons why this plan was not approved by politicians, regulators and central bankers around the world, because they feared it would jeopardize their monetary sovereignty.
Problems with regulators scared away from Libra its members and supporters like PayPal and Mastercard, who left the project in October. Now Calibra has announced that it will issue a series of stablecoins instead of a global cryptocurrency, each linked to a certain state fiat currency. So, Libra thus goes half way to the central banks because it gives them the possibility to issue their own digital currency virtually at no cost.
Libra like another PayPal or a CBDC?
There are basically two options, either the project will end up just as a PayPal competitor, or embark on cooperation with central banks to provide them with the necessary know-how to launch their own digital currencies…
Libra has been one of the main topics for some time now. The cryptocurrency would have a user base of over 1 billion people, which is something even Bitcoin can only dream about. This induces a variety of responses, from regulators to cryptocommunity. The cryptocommunity states that Libra is not a decentralized cryptocurrency, because it will be managed by one of today’s largest social networks. We will see how the case will turn out in time, but in any case we will certainly hear more about Libra.