Facebook’s Libra cryptocurrency will now be available as a single-currency stablecoin, assuaging some of the concerns of regulators. Libra was initially supposed to be backed by a basket of currencies, as well as US Treasury securities, but will now be available pegged to currencies including the US dollar and euro.
“We hope to work with regulators, central banks, and financial institutions around the world to expand the number of single-currency stablecoins available on the Libra network over time and to explore the technical, operational, and legal requirements to access direct custody with them,” Libra said in a statement.
Libra had been met with criticism from several central banks, who were concerned it could destabilise financial systems. The RBA has said that Libra had the potential to be more efficient, raised “significant legal and regulatory risks” – including to consumer and investor protection, monetary policy, and data privacy.
“The main downside of these changes is that the system is less open, and less decentralised, therefore the bitcoin community will probably disregard this as another centralised project,” said CEO and co-founder of eToro, Yoni Assia.
“We are pleased to see the Libra Foundation take an initial step in this direction, by supporting multiple currencies on-chain. We believe that this marks another milestone in the journey towards the adoption of distributed systems in global finance.”