The Libra cryptocurrency, led by Fb, could launch in January 2021
The good news for Facebook's Libra digital currency initiative is that the long-awaited debut is imminent. The bad news is that Libra is likely to come in a format that is greatly scaled down from the original plans.
Hannah Murphy of the Financial Times reported last weekend that Libra will be rolled out in January, naming three unidentified people involved in the project. However, it will debut in the form of a coin based on the US dollar rather than the original plan of digital versions of multiple currencies.
Facebook declined to comment on the report.
The original plan, according to the Libra White Paper, was to introduce a multi-currency Libra coin as a complement to existing currencies rather than as a competitor.
Concerns about possible encroachments on monetary sovereignty and policy if the use of the scales reached sizeable proportions encouraged the addition of "stable coins" in a currency linked to currencies such as the euro, Singapore dollar, British pound and sterling US dollars are pegged.
Murphy reported that the multi-currency coin and the single coins linked to the other currencies were still on the table and would be introduced at a later date.
The debut date for the scaled-down Libra offering depends on the approval of the Swiss Financial Market Authority so that it can act as a payment service provider.
Facebook introduced the Libra in June 2019, and said at the time that the Libra would be controlled by founding members of the Libra Association, with Facebook having the same voice as those other members and not holding a control position.
The company also set up a subsidiary, Calibra, to oversee cryptocurrency efforts. Facebook user data would never be mixed with Libra payments.
The Libra came under fire almost immediately when, the month after the initiative was announced, several Democratic members of the US House Financial Services Committee published an open letter to Facebook executives in July 2019 urging them to "immediately put a moratorium" to agree to the project.
They wrote, “With Facebook already in the hands of over a quarter of the world's population, it is imperative that Facebook and its partners stop implementing plans immediately until regulators and Congress have a chance to investigate these issues and take action. During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and to investigate legislative solutions. If we don't stop implementing before we can, there is a risk of a new financial system based in Switzerland that is too big to fail. "
The Libra Association began losing members at an alarming rate last October. Booking Holdings, eBay, Mastercard, Mercado Pago, PayPal, Stripe and Visa were eliminated, followed by Vodafone in January.
Some good news came in February when Shopfiy, a staunch e-commerce member, became a member of the Libra Association.
Facebook announced in May that its digital wallet for cryptocurrency collective Libra had been renamed from Calibra to Novi.