Something to look forward to: Libra may finally launch in 2021 after a longer than expected wait, but it will be a significantly different version of the original dream of a digital composite coin. Facebook has the scale to make it work, but that will depend on how fast it can get approvals from regulators across the world, who are currently busy navigating the road to economic recovery.
According to a Financial Times report, Facebook’s controversial Libra cryptocurrency could launch as early as January 2021, although it won’t be nearly as impressive as originally planned, and is still pending approval in some regions.
The digital token was announced in 2019 and initially received considerable backing from several financial household names such as Visa and Mastercard, which formed the Libra association to collaborate on the global effort. However, the project quickly caught the attention of the US Senate Banking Committee, which was keen on getting more details on the ambitious initiative, given Facebook’s poor track record in protecting consumer privacy on its platform.
It didn’t take long before those concerns were proven somewhat true as fraudulent ads for the unreleased cryptocurrency started flooding Facebook and the company was quickly overwhelmed in trying to remove them in a timely manner. Then, one by one, high profile Libra backers like PayPal, Visa, Mastercard, Stripe, and eBay signaled their retreat from the project for fear of attracting unwarranted attention from antitrust bodies, which are still investigating Facebook’s every move.
This is why the Libra Association has pivoted towards making one or more “stablecoins” pegged to the value of international currencies, which should aid in launching it sooner.
Due to fierce regulatory pushbacks in some regions like the EU, it’s likely that Libra will simply launch as a single coin backed by the US dollar, and gradually move to incorporate more tokens based on other currencies. Other than that, you’ll be able to use Libra tokens on a standalone app called Novi (formerly Calibra), as well as WhatsApp and Messenger.
The end goal remains the creation of a singular, synthetic coin that is backed by several currencies, but that will take a lot of convincing for regulators around the world who are concerned that it could threaten the stability of the global financial system.
For consumers around the world who are interested in Libra, a token backed by the US dollar could prove a lot less attractive, especially if that means they’ll be hit by additional costs. That said, cryptocurrencies have only become more relevant as a result of the pandemic, and companies such as Binance have launched dollar-backed stablecoins of their own which have seen positive reception so far.
Only time will tell if Facebook can finally crack the formula and enter the crypto market with Libra.