Facebook to Launch Libra Cryptocurrency in January 2021, But in Limited Format

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According to The Financial Times, the Libra cryptocurrency being developed by Facebook’s Libra Association could be launched as early as January next year but in a limited format.

In April this year, Libra Association, which now has 27 members including Facebook, intended to unveil an electronic version of several traditional currencies, plus an electronic digital composite of all its coins. This came after global regulators raised concerns over the Association’s initial plan to create one synthetic stablecoin pegged to a basket of government bonds and fiat currencies.

But now the Association only plans to launch a single coin backed by the US dollar. The other currencies and the composite would be rolled out later in the future.

However, the exact launch of Libra cryptocurrency would depend on when the regulator (the Swiss Financial Market Supervisory Authority) approves the project to operate. Such approval could come as soon as January. FINMA stated that it would not comment matters on Libra’s application whose licensing process was initiated in May this year.

Although the limited scope may appease wary regulators, critics have laid complaints that a move to launch a single-currency coin could hit customers seeking to convert currencies with additional costs, thus undermining its far-reaching ambition to enable greater financial inclusion by empowering billions of people and addressing the needs of the poor and unbanked.

Libra Cryptocurrency Facing Greater Hurdles

Facebook released its white paper in June 2019 with a mission to launch a simple financial infrastructure and global currency in the first half of 2020. However, the announcement received skeptical reception from financial regulators around the world, saying that Libra digital currency backed by traditional money and other assets could threaten the world’s financial stability and monetary system and hinder cross-border efforts to fight terror financing and money laundering and throw up problems for privacy, taxation, and cybersecurity.

Facebook’s cryptocurrency efforts have been met with questions and doubts almost from the time the company announced it in June 2019. The troubled cryptocurrency initiative suffered new blows in October 2019 as the departures of key founding members became an exodus. Visa, Stripe, eBay, and Mastercard dropped out of Libra, a week after PayPal became the first company to pull out from the controversial project.

 

Image source: Shutterstock

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