Facebook's ambitious cryptocurrency could finally see the light at the beginning of next year, albeit in a "limited" version.
Regulatory concerns
Libra, the digital currency project led by social media giant Facebook Inc. (NASDAQ: FB), is set to launch early next year, according to a recent Financial Times analysis. However, there is no prospect of any short-term escape from Bitcoin due to Libra.
Three people involved in the project have stated that the launch will be done in a "limited" version, which is a significantly reduced version of the original Libra aspirations. The Geneva-based Libra Association will issue and govern Libra.
When it was devised in 2018, Libra was supposed to be an internationally used and accepted digital currency backed by several fiat currencies and 27 members supporting the association. However, regulators soon took action to stop Libra's development, citing it as an attack on monetary stability and a means of financing terrorism.
Libra's business partners, such as PayPal (NASDAQ shares: PYPL), Mastercard and Stripe, abandoned the project soon after. Facebook downsized the plan to appease regulators in April, however, many criticized the action, arguing that it was against Libra's financial inclusion mission.
Subsequently, the appointment of HSBC's chief legal officer and former George W. Bush-era terrorist financing prevention officer, Stuart Levey, in May, as first chief executive officer, represented a turning point for the project. This move was once again helpful in framing the Libra Association as an entity independent of Facebook.
The Libra saga continues
Libra is back in the limelight with a less ambitious version of itself. With Facebook simplifying its digital currency project, it's interesting to see the impact this will have on the market.
The limited version will be supported on a one-to-one basis with the US dollar, similar to regulated stablecoins such as USD Coin and Gemini Dollar operating in the cryptocurrency market today.
Additional fiat supports would be implemented at a later date after thorough legal and regulatory compliance, the report said. The same reduced version ready for launch awaits approval by the Swiss Financial Market Supervisory Authority, to have the green light expected in early January.
Meanwhile, the Financial Times report added that some Libra members, such as the Spotify music app and the Uber app, may be using the currency as a payment method in their respective platforms, but would wait to see general reaction first.
The news comes when PayPal, one of Libra's original members, launched their cryptocurrency buying and selling service this month, garnering warm response. For now, Libra will have to make do with its stablecoins.
