The coins could include those issued by central banks and backed by the US dollar, the euro or other currencies/iStockby Bloomberg
Facebook and its partners are considering redesigning the Libra cryptocurrency project so that the network accepts multiple coins, including those issued by central banks, in an effort to woo reluctant global regulators and rebuild momentum for the plan.
When Facebook unveiled Libra, it said it intended to create a single global digital currency. Anyone, especially the 1.7 billion people who have no bank account, could send money anywhere in the world at little cost, as easily as sending a text.
Eight months later, after the idea ran into a wall of opposition, Facebook and the Libra Association, the consortium behind the digital currency, are looking at a revamp.
The coins could include those issued by central banks and backed by the US dollar, the euro or other currencies.
But if the revamped Libra becomes more of a payments network than a single, global cryptocurrency, the average US consumer might not see much difference between Libra and existing payments systems run by PayPal Holdings or numerous fintech start-ups that aim to seamlessly move funds around the globe.
Dante Disparte, the Head of Policy and Communications for the Libra Association, said, “The Libra Association has not altered its goal of building a regulatory compliant global payment network, and the basic design principles that support that goal have not been changed.”
What happened to Libra since its June 2019 unveiling is a story of hubris, wary lawmakers, protective regulators and partners fearful of the risks involved. Facebook and 27 other companies announced the project as a way to connect the globe—while also circumventing the financial system—and reduce the cost of sending money, especially for unbanked populations.
The project’s members included Visa, Mastercard and other large companies that would be Facebook’s partners in governing the system.
As originally envisioned, the Libra coin would be created from a basket of relatively stable assets, such as US dollars and government bonds, euros, Singapore dollars, UK pounds and Japanese yen.
Additionally, a Libra Reserve made up of those currencies and debt instruments would support the token, whose value would adjust along with the underlying assets’ market value.