Facebook’s Libra could launch as early as January 2021
Facebook could launch its digital currency Libra as early as January 2021, Financial Times sources confirm.
But it’s likely to take an even more diluted form than its already scaled-back proposal. It looks set to be a single coin backed one-for-one by the dollar, with other currencies held back for a later, unspecified date.
Launch of the single coin depends on the Swiss Financial Market Supervisory Authority (Finma) approving the project to operate as a payments service. Facebook submitted Libra’s application back in May.
Earlier this year, the association said it wanted to launch Libra by the end of 2020. PayPal, a Libra partner dropout, announced in October that US customers would soon be able to buy, sell and hold cryptocurrencies via its digital wallet.
The news likely hiked up the pressure on the Libra Association, and its wallet builder Novi, to roll out its own digital currency offering.
The first revision
Published back in April, Libra’s first revision tried to placate regulators. That’s after its original version, launched in 2019, hit a series of roadblocks.
European countries’ regulators said it could “unlawfully privatise money”. As more regulators pushed back, prominent partners of the project dropped out, including Mastercard, eBay, and Visa, in a bid to distance themselves from the controversy.
Instead of stablecoins backed by a mixture of currencies and government debt, Libra’s first revision suggested stablecoins pegged to national currencies.
Governments would therefore be able to “directly integrate” any future central bank digital currencies (CBDCs) into Libra’s network. It’s also promised a “digital composite” of all of its coins in this version.
But the newest version has simplified the launch further, falling back on one global stablecoin based on the US dollar.
Libra’s wider revamp
The Libra Association consists of 27 members. These still include big names such as online payments processer Checkout.com, and Singapore’s state-owned investment firm Temasek.
In May, the association landed HSBC’s chief legal officer, Stuart Levey, as its CEO to boost its regulatory credibility.
Levey previously served as the Under Secretary of the Treasury for Terrorism and Financial Intelligence for George W. Bush and Barack Obama.
A new CEO also marked a big moment for the project. It broke away from Big Tech parent Facebook, whose CEO Mark Zuckerberg was caught up in a hearing with the US Senate in April over privacy concerns.
Novi’s digital wallet, which will hold Libra’s currency, is “ready from a product perspective” according to Financial Times sources. But the company is currently prioritising “half a dozen high-volume remittance corridors”.
These include routes into US and some Latin American countries. Novi also requires a licence in each US state. Financial Times sources say it is still waiting on “as many as 10” — including a New York Bitlicense.