The Libra Association modified its white paper to conform to international regulations. The project would depart from its cryptocurrency ideal of approaching existing payment systems.
Last Aril 16th, the Libra Association, led by Facebook, announced a second version of the white paper on its Libra project. The document mentions several changes to the project, which include issuing a basket of individual stablecoins tied to national fiat currencies.
For example, there will be an issuance of a LibraUSD for the US dollar, a LibraEUR for the euro, a LibraGBP for the British pound and a LibraSGD for the Singapore dollar, according to the document. Along with all these stablecoins, Libra (LBR) itself will also work, with a basket consisting of these stablecoins instead of fiat money as they reported last year.
They will tailor changes to the requirements that international regulators requested. The association itself admits that its objective is not to replace national fiat currencies. They say that they hope to work with central banks and financial institutions worldwide.
The design of the Libra network is that of a low-cost globally accessible payment system, a complement rather than a replacement for national fiat currencies. The stabilization of currencies and the preservation of value are key efforts within the exclusive purview of the public sector. Therefore, the Libra network is undergoing an increase by including stablecoins in a single currency, such as USD, EUR, and GBP, among others, according to the association.
There is evidence of the approach towards regulatory authorities, instead of towards users, in the fact that the association itself states that it seeks to provide a clear path to safely integrate central bank digital currencies (CBDC) as they become available. In other words, one of its objectives would be to facilitate the operations of potential national digital currencies using its centralized blockchain.
The support for Libra as a multi-currency unit and individual stablecoins will build on cash or cash equivalents, government bonds, and the funds in the currency itself that users deposit.
With these decisions by Facebook, the project that it revealed in June of last year, would show a departure from its ideal of creating a real cryptocurrency to approach payment systems that already exist in the market and are regulated by financial institutions themselves.
Reactions on Social Networks
Cryptocurrency users and enthusiasts shared on the social networks their opinions about an announcement by the Libra Association. Udi Wertheimer stated that Libra will now be “a clone of Venmo,” a well-known PayPal subsidiary payment system.
People on several fronts have questioned the Libra project in the past. Banks, financial regulators, and even cryptocurrency enthusiasts themselves have debated against it. The latter do not consider it a cryptocurrency, a vision that renowned professor and bitcoiner Andreas Antonopoulos shares.
The association is composed of 22 companies that would be responsible for one of the nodes that would form the network. Among these are Xapo, Uber, Shopify, Coinbase, and Lyft. Other large corporations such as Visa, MasterCard or eBay joined the association but then decided to withdraw to pursue other priority projects.
By Alexander Salazar
