Facebook proposes giving Libra a twist by tying it to the currencies of the countries where it operates to reassure banks and regulators

Libra, the ambitious cryptocurrency with which Facebook seeks to change the international monetary system and incidentally the economy, is not going through its best moment. Libra is currently in the midst of severe regulatory scrutiny where more questions are raised than answers, while at the same time seeing seven of its important allies withdraw their support for the project.

Now during a recent banking seminar, David Marcus, current leader of the Libra project on Facebook, clarified some points about the cryptocurrency trying to calm doubts and in a clear message directed to regulators. And is that the Facebook executive mentioned that Libra’s main goal was to “create a better payment system” and that they were open to “alternative approaches” with respect to the original structure of the project.

Skepticism grows and Facebook seeks to calm the waters

Last week the first official meeting of the Libra Association took place, which came just after the departure of seven of its members, who represented a large part of the strategic value and commercial weight of the project. Here, contrary to what was expected, no changes were proposed by maintaining the same structure without clear answers, so now David Marcus is finally talking about strategy changes.

The most important of these changes is that Libra would no longer be a synthetic currency, a “global cryptocurrency”, as it had originally been proposed, but now they would seek to make it a currency linked to the local currencies of each of the countries where it operates. That is, Libra would become several stablecoins, one for the dollar, another for the euro, one more for the British pound, and so on.

“We could do it another way. We could definitely approach this with a large number of stablecoins that represent national currencies in a tokenized digital form. That is one of the options to consider.”

With this, each Libra would operate according to the rules of each country and Facebook would “give up” part of that power and control that set off regulators’ alarms. However, Marcus hinted that this option is not the favorite of the members of the Libra AssociationThis is due to the level of operation required and the constant changes in the face of currency parity.

“What matters to us is the mission and there are several ways to do it.”

According to Reuters, the financial leaders of the G-20 will meet this coming Friday to study the implications of Libra, as well as to establish strict regulations on cryptocurrencies, since these currencies “should not be issued until various global risks have been addressed. Money laundering, illicit finance and consumer protection need to be evaluated before any ‘stablecoin’ project can go live. “

So for the moment everything remains the same, regulators continue to analyze the possible risks of allowing the entry of Libra, although now it is linked to each of the “official” currencies. While Facebook keeps its Libra release date for June 2020, although Marcus now recognizes that due to all this regulatory movement they could not reach this date and delay the project.

“We have always said that we would not move forward unless we have addressed all concerns and obtained proper regulatory approval. So it is not entirely up to us.”