Since announcing its Libra stablecoin project, social media giant Facebook has had to tackle significant setbacks. The asset had been scheduled for a launch in June and it appears that it is now set for a complete overhaul. It was reported by the Financial Times that the Silicon Valley giant is gearing up for a 2021 launch and it will be a US dollar-backed stablecoin. The Financial Times cited sources that were familiar with the project and explained that a single currency peg had been chosen by the Libra Association for the asset. Eventually, they do plan on adding other fiat currencies to the basket of assets that would back the stablecoin, but for now, it will be a dollar-backed stablecoin.
This development marks a significant change in stance from the initial plans for the Libra project. When the asset’s whitepaper was announced by Facebook, the company had confirmed that several currencies would back the asset, including the Japanese yen, Singapore dollar, the British Pound and the US dollar. But, things have changed now, as the project has been struggling for quite a while. Now, it is reportedly going to launch in January of 2021. However, no official launch date has been announced.
As far as the official announcement is concerned, it shows that licensing procedures have been initiated by the Libra Association from the Swiss Financial Market Supervisory Authority (FINMA). A representative of the agency said that they were not at liberty to talk about anything related to the company until the licensing process has been completed. Since the announcement of the asset, there have been a number of changes made in Libra. Even though there has been regulatory pushback abroad and home, a number of concessions and changes have been made by Facebook to the asset.
Moreover, the social media giant has also had to deal with the departure of a number of companies from the Libra Association. Most notable ones are PayPal and MasterCard, the former of which has already introduced crypto trading services and is now aiming to improve the functionality of digital assets as a means of payment. Regardless of these challenges, Facebook is adamant to introduce this stablecoin in the market. The company needs to curry favor from regulators, especially at its home base. In the last few months, a number of former officials at regulatory agencies and policy advisers have been hired by Facebook for keeping Libra alive.
Last week, the company announced that it had hired top regulatory and compliance expert, Saumya Bhavsar, the new general counsel for the Libra Network. She has over two decades of experience in compliance, legal and regulatory experience and previously worked with banking giant Credit Suisse, the European Commission, and the United States Treasury Department. According to the Libra Network’s managing director, Jeffrey Emmet, Bhavsar is a strategic leader with a lot of success in operational, legal and regulatory roles and will help Libra in navigating the regulatory landscape and ensure that it operates within the set rules.