Facebook tweaks its Libra cryptocurrency in hopes of getting green light By April 17, 2020 By Brenna Hughes Neghaiwi and Tom Wilson ZURICH / LONDON, Apr 16 (.) – Facebook’s Libra cryptocurrency, scheduled for launch this year, will be tied to individual national currencies and overseen by global bodies, as part of a reformulation that it hopes will gain acceptance by regulatory authorities..The prospect that the 2.5 billion Facebook users The adoption of Libra has generated intense scrutiny from regulators, concerned that their launch will erode national control over money.Libra’s governing body, which is seeking approval from Switzerland’s market supervisor, said Thursday it will now offer “stablecoins” backed by individual currencies, as well as a redesigned “token” based on those currencies.to which it is linked.The original plan was for Libra, which was unveiled last June, to be backed by a mix of currencies and government debt.However, central banks and regulators feared that it could destabilize monetary policy, facilitate money laundering, and erode user privacy, with some blocking threats, even.In response, the Libra Association, which will issue the currency and rule the network, said a “college” of central banks, regulators and agencies in more than 20 countries established by the Swiss entity FINMA will have a voice in its bid to receive the license as a payment service provider in Switzerland.The Geneva-based Libra Association declined to elaborate on the body’s members and it was not immediately clear how regulators will respond to its updated plans.
FINMA acknowledged on Thursday that it had received Libra’s application for a payment system license, ensuring that the result and duration of the process is somewhat open.He did not elaborate on the role that other authorities will play in Libra’s eventual regulatory approval, but said he maintains close contact with authorities and central banks around the world and believes that an “internationally coordinated approach” is necessary to the scale of the project.
.Libra, scheduled to launch in late June, hopes to be able to do so now between mid-November and the end of the year, said Dante Disparte, director of policy and communications.Countries like France and Germany indicated that they would try to block the launch of the Pound, while other global bodies were working to establish rules for “stable currencies”.SAFEGUARDS Libra said it will now offer its “stablecoins” based on a selection of individual currencies yet to be decided.As possible examples, he referred to “stablecoins” based on the dollar, the euro and the pound sterling.
He also stated that he will also offer a renewed “Pound Currency”, made up of individual currency tokens, for potential use in cross-border remittance sending.“We are maintaining the construction of a multi-exchange Pound, but fundamentally altered and simplified in relation to the original,” said Christian Catalini, chief economist at Calibra, Facebook’s digital portfolio, which will offer Libra through its Messenger and WhatsApp platforms.Libra also indicated that it will increase protections for Libra Currency reserves in the event of “extreme market turmoil.” The reserve will have liquid assets with short maturities and low credit risk and a capital buffer, although the level has not been decided yet.Another change is that the Pound plans to strengthen safeguards against money laundering and terrorist financing.The Association will register with the US Treasury Financial Crime Network (FinCEN) as an exchange services business, which will lead to increased reporting and record keeping requirements.Central banks have accelerated their analysis of the issuance of their own digital currencies in response to the Pound.China is closest to launching one, while in the West it seems a more distant option.
Aside from the original goal of bringing financial services to people without access to banks, Libra said the redesign will help governments transform payment systems.The reformulation could allow governments to “directly integrate” any future digital currency into their network, Libra said.(Edited in Spanish by Carlos Serrano).
