Facebook is Changing Stand on Libra cryptocurrency After Intense Regulatory Scrutiny

Facebook may consider amending its plan to release the cryptocurrency Libra in 2020.

When last year the social media giant launched Libra, it did so believing that the cryptocurrency would be a simple global currency with the power to transform the global economy. Regulators quickly noticed, and realized that the organization had to give more questions than answers as to what would be the digital currency.

While Libra is still moving forward, Facebook will now sell currencies like dollars and euros issued by the government to fund its own token. The change seems to be a way to appease reluctant regulators and gain additional support for the program, which is still scheduled for Q4 implementation.

All crypto and stated-issued currencies will be available on the company’s digital wallet, Calibra, according to a Mar. 3 report issued by Bloomberg.

Through redesigning the digital wallet, and scaling back the cryptocurrency functionality, Facebook plans to release both Calibra and Libra concurrently, tentatively in October. Calibra will allow users to send and receive money and to make purchases — now in fiat currency.

Nearly two billion people worldwide use Twitter. Expanding the basket by including central bank currencies encourages anyone to use Calibra as a more traditional system of payments. With the tap of a button, any user with Messenger or WhatsApp installed on their mobile device may send funds around the globe.

Objection against Libra Cryptocurrency since its release

Facebook seemingly introduced Libra as a means of fully bypassing the global financial system. While the proposal was ambitious, with so many unanswered questions it left lawmakers and regulators wondering the dangers of bringing the cryptocurrency into the market.

The business has been suggested by officials in the United States to add existing cryptocurrencies including Bitcoin to Calibra instead of creating their own. Other recommendations included bringing stablecoins into the digital wallet basket to prevent it from undermining central bank currency sovereignty.

There was similar skepticism about Libra in Europe. Lawmakers in Germany and France strongly opposed the EU’s adoption of the cryptocurrency. Switzerland, however, was one of the few open to international cooperation with The Libra Group, saying that the currency “fits perfectly into our regulatory framework.”

One silver lining to the rocky start of Libra may be the central banks ‘ reaction in learning to accept digital currencies as the new reality. Several countries have been pursuing minting a digital currency since the project was announced including Japan, China, and England.

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