The Facebook-backed Libra Association, the governing body behind the Libra cryptocurrency project, is revamping to support fiat-pegged cryptocurrencies, while dropping its plans for a single cryptocurrency backed by a basket of fiat currencies and short-term U.S. Treasury bonds.
According to Bloomberg, each fiat-pegged cryptocurrency will work like a digital version of a country’s existing currency. The changes were made in response to regulators’ concerns surrounding the original Libra cryptocurrency project. The organization has now also begun talks with Swiss regulators, and hopes to register with the Financial Crimes Enforcement Network in the U.S. as a “money services business.”
According to the Libra Association’s head of policy, Dante Disparte, the project could be ready later this year. He said:
We’re working toward a late 2020 readiness timeline.
The original cryptocurrency project faced criticism from regulators over worries it could usurp central banks’ financial sovereignty, to the point several founding members – including PayPal, MasterCard, and Visa – left the Libra Association.
It’s currently unclear whether the changes the Libra Association is making will appease financial officials, but Facebook has in the past stated the Libra cryptocurrency project wouldn’t be launched without regulatory approval.
The changes, according to Bloomberg, could also make it easier for other companies to join the Association as members. Although some of its founding members left, others have also joined. One of the Libra Association’s new members is Shopify, an e-commerce giant that reportedly helped over one million businesses launch their own stores.
According to Disparte, members have financially contributed to pay for the Association’s operations, with Facebook providing “less than 10%” of the funds. It’s worth noting that while the organization backpedaled on its initial project, it still hopes to launch a Libra cryptocurrency made up of “a digital composite of some of the single-currency stablecoins.”
Christian Catalini, head economist for Facebook’s Calibra, noted that which currency will be adopted will vary on use case, as when sending money across borders the “multicurrency Libra could be a better option, whereas the single-currency stablecoins would make more sense for everyday purchases in a consumer’s home country.”
Featured image via Unsplash.