The embattled Libra cryptocurrency, built by Facebook, will make its long-awaited launch as early as January after a tumultuous two years in development and rising scepticism among backers and regulators.
The social media giant announced its own stablecoin in June 2019, backed by a host of big names in the finance sector, as a means for customers to send and receive payments without the need for a banking intermediary.
Libra almost immediately attracted backlash, however, with US regulators quick to question Facebook over how it plans to handle data protection and privacy concerns. Big brand names began to waver in October, with Mastercard and Visa pulling their support for the project, with reports emerging shortly after that not one of the 21 partnering firms had provided their expected $10 million pledge.
After spending months in the wilderness, Facebook appears to be readying the launch of its cryptocurrency for early 2021, according to the Financial Times. Following intense regulatory pressure, this will now launch a single digital coin backed by the dollar.
There is no precise launch date as yet, and this would depend on when the Libra Association, an open source non-profit which governs the cryptocurrency, will receive regulatory approval by the Swiss Financial Market Supervisory Authority.
A major turning point for the Libra Association, and likely what made the digital currency viable, was the appointment of Stuart Levey, HSBC’s former chief legal officer, as the group's CEO in May. Such an appointment would have relaxed a number of external concerns, while also ensuring the project lay in the hands of somebody with sufficient expertise in regulatory compliance.
Stablecoins are designed to avoid the sort of volatility that digital coins, such as Bitcoin or Ether, often experience because it’s tied to a fiat currency, such as the dollar. This would, in theory, make Facebook’s Libra a far more stable means of making payments than many other cryptocurrencies.
Facebook has also developed its own blockchain, run by the Libra Association, which manages the funds tied to the Libra token.
