Libra, a cryptocurrency project led by social media giant Facebook, has announced its plans to launch a US Dollar-pegged stablecoin in January of 2021.
According to a publication of Financial Times on Friday, November 27, highly- suppressed Libra might get off the ground as early as January 2021, but still, the exact date of the launch depends upon the regulatory approval from the Swiss Financial Market Supervisory Authority.
This will be a single stablecoin backed by the US Dollar rather than its original plans to create one global coin backed by a basket of currencies. According to a person involved in the initiative, stablecoins backed by other currencies will follow.
Facebook announced the Libra project back in June 2019 that sent a shockwave around the world. Central bankers and lawmakers alike, especially from developed countries including the US and Europe, were not comfortable with the idea of a global payment system developed and run by a social media company.
The initial plans were to launch a Libra Stablecoin (LBR) backed by a bunch of leading currencies such as the US Dollar, Euro, Yen, and British Pound. Unfortunately, these suggestions did not appease regulators and the project continued to suffer the regulatory backlash. The more disturbing period came when its strong allies including PayPal, Vodafone, Stripe, Mastercard, and eBay quit the project.
In April 2020, as reported, the Switzerland-based Libra Association revised its whitepaper announcing major changes to its original vision. The association announced that Libra could launch as a series of stablecoins, each pegged to a fiat currency, rather than one multi-currency basket during that revamp.
The initial plan to create a stablecoin based on an aggregate value of a basket of currencies still exists but in a slightly modified form. The original Libra token (LBR) will now be backed by a basket of other stablecoin like Tether (USDT) and USD Coin (USDC).
Furthermore, the project will not be decentralized and permissionless. Instead, the project will always be under the influence of the association.
All these changes have changed the shape of the project, only the painting is same. This could give Libra a green-light to launch but, according to Financial Times,
“critics have complained that a move to single-currency coins could hit users looking to convert currencies with additional costs, undermining its ambition to enable greater financial inclusion.”
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