The Facebook Libra stablecoin will launch in January 2021 despite regulatory concerns. Libra will initially be backed by US dollar only at a 1: 1 ratio.
According to the Financial Times, the Libra stablecoin may be launched early next year. The publication refers to the information of anonymous sources – “three people participating in the initiative.” The stablecoin will be pegged 1: 1 to the US dollar.
Last September, Facebook unveiled the official list of currencies that will be in the basket providing Libra. Then it was assumed that the stablecoin would be backed by the US dollar, euro, yen, pound and Singapore dollar in different proportions.
However, in April, the Libra White Paper was updated. The developers stated that the value of the base LBR cryptocurrency will be calculated based on a whole basket of stablecoins with different shares for each. The original plan was to issue LibraUSD pegged to the US dollar, LibraEUR to the euro, LibraGBP to the British pound and LibraSGD to the Singapore dollar.
But it appears that the Libra stablecoin will initially be backed by the US dollar only, pending approval from the Swiss financial regulator FINMA. Recall that last fall, the Libra Association applied for a license to operate the payment system to the Swiss financial regulator. An extended version of Libra can be launched later.
As a reminder, Facebook first announced plans to release a stablecoin in May last year. Then it was assumed that the GlobalCoin cryptocurrency would be released in 2020. Facebook’s plans immediately met with backlash from lawmakers around the world, who expressed concerns that stablecoin could threaten financial stability or contribute to money laundering. Facebook later helped form the Libra Association, which now has twenty-seven members.
