On April 16, the Libra association presented a revised digital currency project, following the particularly severe observations made by financial and political authorities. Despite a few changes, Facebook plans to launch its digital currency at the end of the year.
A multi-currency currency
After several months of discussions, Libra, the company responsible for launching Facebook's digital currency, is reviewing its plans. Based in Geneva, the association has applied to the Swiss authorities for a license as a "payment system" for a launch scheduled for late 2020.
Facebook's 21 partners in the organization have lowered their initial ambitions. Although it was to be backed by a new currency created and indexed on a currency reserve, libra will in fact be a multi-currency currency (dollar, euro, pound sterling, etc.).
The association claims to have modified the original project in response to feedback. In the payment system, several currencies will coexist: digital currencies based on the euro or another sovereign currency, and a libra that will serve as the currency of exchange. According to the regulator, as each libraEUR is backed by a reserve of euros, "there is no money creation". Users will be able to convert the libras they receive into local currency via third parties or financial service providers. The crypto-currency can also be used to transfer money instantly at lower rates than those currently charged on the market by banks or Western Union.
Enhanced safety
On the subject of security, Libra has announced the creation of a "financial intelligence unit" which will be equipped with experts and technological tools to detect and block fraudulent behavior. Protections around its currency reserves have also been strengthened. Holding safe, liquid assets helps to avoid sharp market fluctuations. Bertrand Perez, acting director of Libra, points out that the governance of each reserve "will have to comply with rules defined with the regulator" to enable everyone to exchange Libracoins for another currency in a transparent manner, even in the event of a major financial crisis.
Launch scheduled for the end of the year
In a press release, the association states that it intends to launch its blockchain by the end of the year. The filing of its license application with Finma, the Swiss supervisor, is an important step in the implementation of its project.
Libra reports that another concrete step has been taken: the members, who each paid 10 million euros to join the project, have invested to pay for operational expenses (employees, software, infrastructure...).
In order to move forward, Libra had to revise certain aspects of its project. It remains to be seen whether this new copy will be approved by American regulators.