Daily Management Review

Currency-Pegged Stablecoins Could Be Used For Libra Project, Says Facebook


Currency-Pegged Stablecoins Could Be Used For Libra Project, Says Facebook
Having faced with growing and severe skepticism from multiple quarters and regulators over the proposed digital currency of Facebook – Libra, the social media company said that it was ready to use cryptocurrencies based on national currencies such as the dollar in place of the earlier proposed use of a synthetic one.
The main of the launch of the Libra project for Facebook’s digital currency is still to develop a more efficient payments system, said David Marcus, who heads the Libra project for Facebook, while talking in a banking seminar. But he also added that the social media company and the project and those backing the project were also ready to consider other alternatives for the currency token that would be used by it.
"We could do it differently," he said. "Instead of having a synthetic unit ... we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc," Marcus told the panel.
"We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form," he said. "That is one of the options that should be considered."
He however was also quick to clarify that his comments were not suggestive that the Libra project is now choosing to use currency-pegged stablecoins.
"What we care about is the mission and there are a number ways to go about this," Marcus told Reuters after the panel, adding that the Libra needed to "demonstrate a lot of agility."
Earlier this month, the exit of some of the major payment companies Mastercard Inc and Visa Inc became big blows to the Facebook-led project. There were exits of other companies backing the Libra project earlier which includes the likes of Stripe, eBay Inc and Booking Holdings Inc and PayPal Holdings Inc.
Worries about the undermining and upending of the global financial system because of the creation of a new synthetic global currency have also been expressed by global policymakers. They are also worried about the potential of Libra to increase opportunities for money laundering and threatening privacy of its users.
An agreement in favor of setting of set strict regulations on cryptocurrencies was arrived at by the finance leaders of the Group of 20 countries. They said that set strict regulations on cryptocurrencies, such stablecoins should not be issued.
While saying that the earlier announced deadline for the launch of Libra could get delayed because of regulatory issues, Marcus also confirmed that the company is still sticking to its goal of launching of the Libra in June of 2020.  
"We'll see. That's still the goal," Marcus told Reuters when asked if the recent departure of several major partners from the project would delay the planned 2020 launch. We've always said that we wouldn't go forward unless we have addressed all legitimate concerns and get proper regulatory approval. So it's not entirely up to us," he said