Instead of having a single digital toke tied to a basket of currencies, multiple cryptocurrencies backed by different currencies such as dollars; might be opted by Facebook as per the company for its Libra project. While the former was being planned initially, it has been shared by the executive leading Facebook’s blockchain initiative, David Marcus that the choice is yet to be made as different alternatives are being contemplated by the company.
In a banking seminar he was reported saying that a series of stable coins, could be chosen instead of having a synthetic unit. The objective of the project is to facilitate cross- border payment system with more efficiency. Overseeing the proposed crypto currency is Libra Association, based out of Switzerland. Since the beginning of October, the Association has experienced many setbacks; among them one of the hard hitting ones is the backing out of giants like MasterCard and Visa who were amongst the original member companies.
Their backing out poses the inevitable threat that even the banks might not be willing to join, for instance on Friday, Jamie Dimon, the CEO of J.P. Morgan was quoted saying, “a neat idea that’ll never happen”, with respect to the group’s currency.
Alleging that the currency might disrupt the financial systems and might have some ill effects like terrorist financing, money laundering and so on; authorities all across the globe and the global watchdog on illicit financing- Financial Action Task Force, have caused fierce regulatory pushback for Libra Association.
A report by the G-7 last week, categorically mentioned that until all legal risks are addressed, no stablecoin project should be given a Go signal.Some relief can still be sought by tech giant IBM which has no plans of backing out.
Nancy Lojas has a Pharmaceutical background. She is pursuing a Masters Degree from the University of Toronto and loves to write about research, discoveries & trends in the Healthcare sector.