The Facebook issued Libra stablecoin will be launched in January 2021 despite regulatory concerns. Libra will initially be backed by the 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 price of the primary LBR cryptocurrency will be formed based on a whole basket of stablecoins with different influences of each. The original plan was to issue LibraUSD pegged to the US dollar, LibraEUR pegged to the euro, LibraGBP pegged to the UK pound, and LibraSGD that is pegged 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. 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 globe, who voiced 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.
Back in October, Reuters got access to a document, according to which the finance ministers of the G7 countries are planning to prevent the Libra stablecoin from entering the market until the introduction of “adequate” regulation.
