almost 4 years ago • 2 mins
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 😩
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.
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 😓
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.
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