In the regulators’ sights, Libra could nevertheless make its debut as early as January 2021. The ambition would be less ambitious, however, with the launch of a stable corner backed only by the dollar. The green light of the Swiss regulator has yet to intervene.
Facebook’s global stablecoin project was getting off to a flying start. However, the mobilization of the regulators of the major powers quickly put a brake on the Libra project’s ardor.
The Libra project is nevertheless continuing to develop, as evidenced for example by the recruitment of financial and lobbying experts. But according to the Financial Times, Libra could be embodied in the form of a stable corner from the beginning of next year.
Quoting “three people involved in the initiative”, the business paper believes that Facebook and its partners will introduce a dollar-backed cryptocurrency as of January 2021.
No more baskets of different currencies, including the euro, therefore. Nothing surprising. This was part of the concessions to the regulators. In April 2020, Facebook gave up on making Libra a “global” cryptocurrency.
According to the FT, Libra’s stablecoin would therefore take the form of a token based solely on the dollar with a ratio of 1 to 1. And it could therefore come into being in just a few months’ time, even if the green light from FINMA, the Swiss financial regulator, is still needed.
As for the other currencies in the basket and the composite, they could be deployed at a later date. With this first stablecoin, Facebook and its allies will already be able to test not only the reception of consumers and the payment network, but also the reaction of the regulators.
Last month, the finance ministers of the great powers made no secret of their hostility. “The G7 continues to maintain that no global stablecoin project should begin operations until it meets the relevant legal, regulatory and supervisory requirements through appropriate design and adherence to applicable standards.
However, this framework is not yet in place, particularly in Europe. At the end of September, the European Commission presented its digital finance package. The future framework foresees “strict” obligations for issuers of major stablecoins.
Regulation will be even more demanding for the latter. They will have to comply with “stricter capital requirements, liquidity management and interoperability requirements”, as the European Commission wishes.