Facebook Considers Alternative Currency for Libra

As you may have heard, Facebook announced its Libra cryptocurrency, and Calibra digital wallet, in July of 2019. Since then, some of the companies that were founding members of the Libra Association have left it. According to Reuters, Facebook is now considering “alternative approaches of the currency token” that Libra would use.

Facebook Inc (FB.O), facing growing skepticism about its digital currency project Libra, said on Sunday the initiative could use cryptocurrencies based on national currencies such as the dollar, instead of the synthetic one it initially proposed.

There were originally 28 founding members of the Libra Association. PayPal made the decision to forgo further participation in the Libra Association on October 4, 2019. CNBC reported on October 11, 2019, that Ebay, Stripe, Mastercard, Visa, and Mercado Pago “are all dropping out of Facebook’s libra cryptocurrency project”. Reuters reported that Booking Holdings Inc has also left the group.

David Marcus heads the Libra project for Facebook. Reuters reported that Marcus told a banking seminar that the Libra Association’s main goal was to create a more efficient payments system, but that it was open to looking at alternative approaches of the currency token it would use.

David Marcus shared some potential alternatives: “… we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stablecoin, etc,” That said, David Marcus also stated he was not suggesting currency-pegged stablecoins were the Libra Association’s new preferred option.

Facebook is still aiming for a June 2020 launch of Libra. It acknowledges that the target could be missed due to regulatory hurdles. Personally, I think this is a mess. Those considering using (or investing in) Libra likely are interested in it because it is cryptocurrency. The suggestion that Libra could be based on stablecoin (as David Marcus calls it) could turn off those who prefer cryptocurrency.

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