As several regulators across the globe are criticizing, Facebook’s Libra may shift its plan to launch its stable coin pegged on various fiat currencies. During a Bank seminar on Sunday, David Marcus, Co-founder, and CEO of Libra stated the same. He also added that Libra may launch stable coins pegged to single fiat currencies. Stablecoins are cryptocurrencies but pegged to government-backed currencies like the dollar. These mainly aim to reduce the volatility of the market due to its stable price. In the case of Libra, the aim is to create an efficient cross border payment system.
For a long time, the largest economies are constantly criticizing Libra and questioning its launch because of safety concerns. Libra’s launch date was finalized to address various concerns but the regulators were not satisfied with the team’s explanation.
Even earlier payment giants like Visa, Mastercard and many others broke their association with Libra which was a big setback for the tech giant. This is a result of the continuous pressure of the regulators. Facebook initially proposed one synthetic unit value which will be tied to a basket of currencies and government bonds.
Binance CEO CZ made his opinion about Libra on his twitter account. He stated, “Baskets won’t work for many reasons. Facebook could 1, accept the top 10 cryptos to get users and regulators warmed up, then slide in Libra. Or 2, geofence opposing regions, including the US, to get started. Or 3, say “Libra doesn’t care” and push on…”
Competition with China
Also expert says, strict regulatory scrutiny to Libra is actually negative for the United States as the US has no intention of any digital currency launch. On the other hand, China is working on its own digital currency. They believe Libra is the one digital currency for the country which can compete with the Chinese one. But as the current situation states, if Libra is aborted, China would definitely take lead.
If Facebook shifts Libra as a digital currency to a stable coin as USDT or USDC, the market graph will surely be unpredictable.