A Libra Association executive says it’s still hoping for a 2020 rollout for the digital currency, despite regulatory obstacles and mounting criticism from officials, according to Politico.
Facebook’s plans for Libra have faced a nearly constant barrage of criticism and new setbacks from regulators. Officials have expressed concern that it could undermine official currencies, impact global financial stability, and enable money laundering. The move would also give Facebook even more power, with public trust in tech giants reaching what could be an all-time low.
Unlike Bitcoin, Libra would be a “stablecoin” cryptocurrency, backed by a basket of conventional currencies and assets, and managed by the Libra Association to limit fluctuations.
France and Germany have already ruled out allowing the currency, and several of the Libra Association’s founding members, including Mastercard, Visa, PayPal, and Stripe, have already withdrawn in the face of scrutiny.
Most recently, Swiss President Ueli Maurer said that the Libra project is unlikely to succeed, and has already failed in its current form. Switzerland, where the Libra Association would be based, has yet to give its own approval for the currency. There’s also been discussion of banning the currency entirely in Europe.
“We’ve made a commitment not to launch the project anywhere in the world until such time as it has achieved sort of a satisfactory regime around regulations and compliance and money control and all of these issues,” the association’s head of policy and communications, Dante Disparte, said in a December interview.
But despite these seemingly devastating setbacks, Disparte said Libra’s “ambition” is still to launch in 2020. While they also acknowledge this will depend on regulatory approval, they say the plan is unlikely to fail entirely.
“I think a ban outright would really produce, perhaps long range, more negative consequences for the countries and member states of the EU than for projects like ours,” Disparte said.
The Libra association says that the currency would fight poverty by cutting down on transaction costs and offering financial services for people without access to conventional bank accounts.
To address these problems and defend their currencies against a potential challenge from Libra in the future, central banks are looking into launching their own digital versions of currencies like the dollar or euro.
“At some point a digital euro, to the extent it were to serve households or serve as a cross-border instrument, would effectively have to plug into networks that reach billions of people,” Disparte said, arguing that Libra could offer that network.
He also argued that Libra shouldn’t be seen as a challenge to the role of central banks:
“We don’t control circulation, we don’t control interest rates, we can’t debase value.”
Photo by Anthony Quintano from Honolulu, HI, United States [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)]