- Facebook’s Libra expected to add fiat currencies, sources say.
- The global stable coin is still in the Libra Association’s plan.
In a report from Bloomberg sources familiar with the Libra project, the Association is looking at adding digital based-fiat currencies, a big swap from the global cryptocurrency they plan to launch in the course of the year.
According to the report, the Libra token, which is backed by a range of stable assets, is still in the company’s vision, but development will halt as energy is focused on the digital-based fiat currencies.
Libra Switches To Developing Digital Gov-backed Fiat Currencies
According to the source, Libra is focusing on developing digital government-backed currencies such as the US Dollar, Euro, British Pound, and Chinese Yen. The move from developing its own stablecoin to digital fiat currencies is heavily influenced by the heavy regulatory scrutiny the company is facing from governments across the globe.
Despite focus shifting to government-backed currencies, the Facebook-led Libra will continue to work on its token which will also be featured in the wallet. A representative close to Libra 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 nor has the potential for this network to foster future innovation.”
However, this is a huge downgrade from the promised token that was discussed mid-last year, as it offers similar capabilities in payments as PayPal and Venmo do.
A plan for Libra?
This is not the first time the idea of having a stream of digital fiat currencies on the wallet. CEO of Calibra, the digital wallet, David Marcus spoke at a banking conference late last year speaking of the possible addition of “stablecoins” to the platform. He said,
“We could do it differently. Instead of having a synthetic unit … we could have a series of stable coins, a dollar stable coin, a euro stable coin, a sterling pound stable coin, etc. We could definitely approach this with having a multitude of stable coins that represent national currencies in a tokenized digital form.”
While the plan to launch a stream of fiat currencies will reduce the regulatory baggage the project has been receiving for months, it may end up weakening the prospects of Libra token. Can Libra compete with global fiat currencies on the same platform? Probably not.
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