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Facebook’s Libra ‘cryptocurrency’ gets desperate as it considers stablecoins

Facebook cryptocurrency Libra

Facebook‘s controversial ‘cryptocurrency‘ Libra could be based on national currencies such as the dollar, the tech giant said on Sunday, following increased scrutiny from regulators and governments in recent months.

“We could do it differently,” he said. “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stablecoin, etc,” David Marcus, the project‘s lead, told a banking seminar.

“We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form,” he said. “That is one of the options that should be considered.”

Marcus clarified he was not suggesting currency-pegged stablecoins were Facebook‘s new preferred option.

“What we care about is the mission and there are a number ways to go about this,” Marcus told Reuters following the seminar, highlighting that Libra should “demonstrate a lot of agility.”

Originally, Libra was supposed to be a currency pegged to a basket of international currencies with different weightings (50 percent US dollar, 18 percent euro, 14 percent Japanese yen, 11 percent British pound, and 7 percent Singapore dollar)

Libra has been facing mounting criticism ever since Facebook first announced the project. The company has suffered several setbacks this month, after major companies including Mastercard, PayPal, and Visa, withdrew their support.

Regulators and governments have aired concerns about how a new synthetic global currency could negatively impact the world’s financial system, poses a threat to user privacy, and facilitate money laundering.

In fact, just last week, the G7 said stablecoins shouldn’t be allowed to launch until international risk was properly assessed.

Published October 21, 2019 — 09:00 UTC