Libra Goes Back To The Drawing Board

Libra Goes Back To The Drawing Board

almost 4 years ago2 mins

Mentioned in story

With progress stalled in the face of stiff resistance from banking authorities, Bloomberg reported late Tuesday that Facebook-led “cryptocurrency” project Libra was changing tack – and potentially paring back its plans for a unified global monetary system 😩

What does this mean?

When unveiled last June, Libra boldly envisaged creating a single “stablecoin” whose value would be backed by a basket of real-world currencies and bonds. But the world’s central banks have made their opposition to a privately managed financial network clear – especially one which could compete with their own designs on digital cash.

It now seems that Libra (which recently gained two new partners in ecommerce enabler Shopify andcrypto exchangeTagomi) is bowing to the pressure. It’s instead focusing its efforts on building a regulator-friendly payments network – one that could potentially end up featuring the digital versions of existing currencies under consideration at Libra’s central banking adversaries.

Questions remain about Facebook’s dodgy data record…
Questions remain about Facebook’s dodgy data record…

The Libra coin dream itself isn’t dead just yet. But with key US regulators reportedly still concerned about money laundering, “systemic importance” and its potential stock-style investment status, the network’s rollout – now scheduled for the fall – may see a Libra currency significantly de-emphasized at best 😓

Why should I care?

The US Federal Reserve’s emergency interest rate cut on Tuesday demonstrates the power central banks wield over people’s money – for better (you’d hope) or worse. If the coronavirus continues to wreak havoc with the economy, the US could end up following the likes of Japan in introducing negative rates: which would, among other things, effectively tax money in the bank.

That sort of state control, which would only get easier with digital dollars and yen (even the government can’t get under your mattress, right? 🤔), is anathema to cryptocurrency advocates. And while few of them are crazy about the idea of Facebook-controlled payments, the reduction of Libra to (ironically) a Paypal-style way to exchange government-issued digital cash would likely only further polarize opinions on the future of money.

Article Image
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG