With a revised version of the planned digital currency, Facebook‘s Libra will be supervised by worldwide watchdogs and connected to individual country currencies. The potential of the 2.5 billion users of Facebook using Libra has garnered regulatory scrutiny, Reuters reported.
Libra will now provide stablecoins based on a roster of separate currencies to be determined. It noted stablecoins based on the euro, the sterling and the dollar as potential cases. Also, Libra said it would provide a redesigned “Libra Coin,” which is a combination of some of the tokens that are one currency.
Calibra Head Economist Christian Catalini said per the report, “We’re retaining the construct of a multi-currency Libra, but it’s fundamentally changed, streamlined and simplified relative to the original one.” The first plan was for Libra to be backed by a combination of government debt and currencies.
Regulators and central banks, however, were worried the cryptocurrency could be used in money laundering, make monetary policy unstable and take away users’ privacy. The Libra Association had said in response that a “college” of regulators, enforcement bodies and central banks from over 20 nations put into place by FINMA would have input in its effort to be licensed in Switzerland as a payment service provider.
Libra had intended to roll out by the conclusion of June. It now hopes to do so in the range of mid-November to the end of 2020.
In separate news, the Financial Stability Board (FSB), which is the Group of 20’s (G20) regulatory watchdog, cautioned global regulators that potential stablecoin disruptions should be handled prior to the release of Facebook’s Libra per a report released on Tuesday (April 14).
The organization outlined 10 recommendations for global stablecoins (GSC) that offer a worldwide and unified approach to stablecoin oversight. In June 2019, The G20 mandated that FSB look into GSC-related regulatory issues.