<a href="https://www.cryptoknowmics.com/crypto/facebook-shouldnt-spearhead-libra-project-says-ethereum-co-founder/">Facebook's</a> aspirational universal digital currency project Libra is seeing no headway from regulators. Many policymakers from around the globe have shared their concern over the working model of Libra, saying the project share no characteristics with cryptocurrency. Some even went ahead to say that Facebook was just trying to piggy ride the existing monetary infrastructure by backing its digital currency by a basket of different fiat currencies.

Mark Zukerberg who appeared before Congress at Capitol Hill to address regulator's concerns had assured the lawmakers that Libra won't launch unless the project is cleared by the regulators.  On December 10th Chris Brummer, a Georgetown University Professor <a href="https://fintechpolicy.org/2019/12/10/exclusive-the-libra-white-paper-has-been-edited-with-notable-changes/">pointed</a> out Libra has quietly updated it's White Paper removing all the mentions of "paying dividends." Brummer believed the quite change made into the white paper was a desperate attempt to shed security tag.

The majority of the population are aware of the Libra token which would act as a stable coin backed by a basket of fiat currencies, but the project also introduced another token called Libra Investment Token (LIT) aimed at Investors who were going to be part of the Libra Association. The initial White Paper made several mentions of dividends where they promised that the interest generated from the reserved assets would be used for network development and the dividend would be paid to early investors.
<h2>Eliminating Dividends Would Lead to Conflict of Interest for Libra</h2>
Professor Brummer pointed out that eliminating dividends now won't resolve the problem and would only lead to a conflict of interest for early investors. He explained that Libra token which is supposed to function as a stable coin is backed a basket of stable fiat currencies like Dollar, Euro, Yen etc. The early investors who bought LIT received some incentive from the dividends made on reserves backing Libra.

Now, on one hand, these investors would favour high-risk investment to back the Libra coin, in order to receive higher returns,  which in turn would impact the stable market value of the stable coin. Thus, the LIT is the main problem and looking at Facebook's recent attempt to quietly remove the dividend aspect which they introduced in the first place to lure early investors, it looks like Facebook might do away with the investment token.

Libra Updates White Paper in a Bid to Shed Security Tag

Libra modified its whitepaper to eliminate "paying dividends" phrase, many believe the move by Facebook is an attempt to shed security tag.

An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

Libra Updates White Paper in a Bid to Shed Security Tag

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