After intense regulatory pressure, Facebook decided to change its Libra project
Libra is undoubtedly one of the most ambitious projects ever imagined in the crypto medium. Facebook’s idea of launching its global stablecoin was, however, blocked by the main regulatory bodies in Europe and the United States.
The justifications were mostly based on the argument that Libra offered a real danger to countries’ monetary sovereignty. With that, the launch of stablecoin was being postponed. Libra should have been launched in mid-2019, but as we can see, we are already on the verge of May 2020 and nothing to launch here.
The heavy regulatory scrutiny and the delay to launch caused Facebook to act. Thus the idea of “Libra 2.0” was born, no longer a global stablecoin, but a fragmented currency in different territories with different pairings, such as pound / dollar and pound / euro.
And it is precisely at this point that the question arises: will Libra still be able to do what it promised, be it to change the way we treat money, or to reach a number never seen before by people?
At the moment it seems quite unlikely. First, because Livra’s original idea generated so much negative repercussion between governments and central banks that they were forced to do something about it. The answer: launch CBDCs (digital currencies of state character, such as digital dollar, for example).
Thus, with each country tense its own digital currency, it makes little sense to launch a company stablecoin in each country. Here the Facebook Pound would end up competing with a powerful opponent, after all, will governments favor their own currencies or the currency of a private company?
It is also unknown whether it will be easy to make exchanges between the different versions of Libra. How easy will it be to exchange dollars in the pound / dollar pair and then turn that pair into pound / euro? Or pound / real? Will there be a pound / real? The questions are many and the answers so far insufficient.
What was a global project may end up fragmenting into different local initiatives.
In general, the project can still be very positive for users, mainly because it tries to reach millions of unbanked people, but the new Libra is certainly much lower than what was initially planned.