April 21, 2021

Libra is considering replacing a basket of currencies with a dollar

Libra is considering replacing a basket of currencies with a dollar

Libra Association is considering changing the concept of providing its new stable coin.

Sharp criticism of regulators led the project team to seek new approaches to implement the idea of ​​digital currency. One possible solution is to replace a basket of currencies with US dollars.

Linking a coin to a basket of currencies of fourfiat assets: the US dollar, euro, Japanese yen and British pound will not be able to prevent high price volatility. This was recently stated by Swiss President Uli Maurer. Central banks do not approve of this method of securing the currency, and US lawmakers consider Libra a threat to the dollar and qualify the coin as a security. EU finance ministers have joined forces to ensure that stablecoins like Facebook's Libra are not spread in Europe for fear of their impact on the stability of the financial system.

Amid such widespread criticism, the Libra Association is trying to change the token model itself.

According to insider information, representatives of the projectstarted discussions with European politicians about the possibility of issuing several stablecoins, each of which will be tied to one specific currency, including the euro and the US dollar.

According to Facebook executives, withoutRegulators will not launch the Libra project. If Libra is recognized as a security, the coin will depend on a huge number of laws on banking, securities, money laundering and illegal financing, which will be applied by almost a dozen agencies and departments.

Thus, Facebook can only compromise with lawmakers or abandon the project.