Home Technology Tech news Facebook expected to launch cryptocurrency Pound using dollar as base

Facebook expected to launch cryptocurrency Pound using dollar as base

The launch of the cryptocurrency Lb, project led by Facebook and announced in 2019, it can finally get off the ground in January 2021. After the Libra Association confirmed in April that the digital currency would mirror traditional currencies, a first version should be released based on the dollar. The remaining currencies would be launched later, according to reports by group members to the Financial Times.

The arrival of only one stable currency pegged to the dollar consists of a downgrade of the previous project, which aimed to launch several currencies, with one of them being a composition of all the others – and even more in relation to the original idea, which was considered dangerous by the agencies regulators.

The less ambitious strategy tries to minimize the volatility of the cryptocurrency, in order to generate greater confidence and encourage its adoption after a troubled start in 2019.

As a stablecoin, Libra could offer some price stability and predictability to its users. This form of digital currency is already well known and used by companies like Coinbase, Tether Limited and Paxos.

The deadlocks to the new Libra plan

If Libra is pegged to the US dollar, people outside the United States may incur additional costs, which could partly undermine plans to provide access to a global currency for 1.7 billion people without a bank.

In addition, the project had been criticized for being closely linked to Facebook – which has undergone several privacy scandals recently. It is not known whether just switching to a stablecoin could erase the “side effects” of that relationship.

It is worth remembering that the project also lost some important partners in the process, such as PayPal, which recently expanded support for bitcoin and more cryptocurrencies. In return, the group appointed HSBC’s former legal director, Stuart Levey, as CEO of Associação Libra.

For the launch to be official, the Libra Association is subject to approval to operate as a payment service by the Swiss Financial Market Supervisory Authority (FINMA).

With information: Financial Times and Mashable

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