In June of last year, Mark Zuckerberg became anathema to world supervisors and banking when launched its Libra project , which pointed directly to the heart of the traditional monetary system.The creator of Facebook proposed a new paradigm that put institutions in check and threatened to blow up the status quo.Ten months later and after undergoing the intense scrutiny of the authorities, the formerly ‘enfant terrible’ has tamed its cryptocurrency proposal and it has come under pressure to make it an acceptable project in the eyes of the guardians of world money.
In mid-2019, Libra was going to change everything, cryptocurrency experts recall.It was billed as a global currency backed by tech companies and corporations, but the prospect of Facebook’s 2.5 billion users eventually adopting the new crypto currency generated intense scrutiny from regulators, concerned about the possibility that its launch erode national control over money .
Almost a year later, the sponsors have been abandoning the project and it has been revised in such a way, to make it digestible in the eyes of the legislators, which has completely lost the starting focus, analysts lament.According to ‘.’, Libra’s governing body, which is seeking approval from Switzerland’s market supervisor, said Thursday that will now offer “stable coins” (“stablecoins”) backed by individual currencies, as well as a redesigned “token” based on those currencies to which it is tied.
In short, the project of the creator of the social network based in Menlo Park will end up becoming a payment network associated with fiat currencies and will resemble PayPal more than bitcoin .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 service provider.
payment in Switzerland.
“The main drawback to these changes is that the system will be less open and less decentralized, and therefore the crypto community may belittle it as another centralized project,” says Yoni Assia, CEO and co-founder of eToro.However, it celebrates that “these changes allow significant progress, by allowing a possible launch of Libra ”“They are adopting a more regulated strategy and following the recommendations for change aimed at greater cooperation with local regulated institutions to favor transactions in national currencies,” he argues.
“We are pleased to see that the Libra Foundation has taken an initial step in this direction, by supporting multiple cryptocurrencies.We are convinced that this marks another milestone on the road to the adoption of distributed systems in global finance ”, insists the founder of eToro.
“No one wins in a world in which the payment system we are trying to build weaken security and compliance and protections, “explained Dante Disparte, vice president and chief policy officer of the Geneva-based Libra Association, to justify reorienting the project.” What we aspire to is a very, very high operating standard that shows that including people in the formal economy do not have to come at the expense of the rules that protect the economy itself, “he stressed.
‘Reuter’s clarifies that Libra will now offer its “stable coins” based on a selection of individual coins without a decision yet.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.
The project now also has protections for Libra currency reserves in the event of “extreme market turmoil.” It also plans to strengthen safeguards against money laundering and terrorist financing..