When Libra was launched earlier this year, the vision was clear: Due to immense financial exclusion and friction in today’s financial system, a new system with lower barriers to entry should be launched to boost the world’s economy and the living conditions of those excluded.
There is no one “best” way to accomplish this vision, however. Hence, David Marcus, a co-founder of Libra and head of Facebook’s cryptocurrency subsidiary, recently revealed that he’s open to using different solutions to run Libra.
Libra Could Use Stablecoins
In a Washington banking seminar hosted by the Group of 30 (G30), David Marcus revealed that Facebook is open to tackling Libra from a different angle than what was previously reported. Instead of the synthetic currency model, he suggested that Libra could use an array of cryptocurrencies, stablecoins specifically, that would be pegged to sovereign currencies instead of a singular Libra cryptocurrency itself.
“We could do it differently… Instead of having a synthetic unit… we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc […] We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form. That is one of the options that should be considered.”
It isn’t clear of Marcus is implying that Libra users will be segregated by regions or currency, or how Libra’s promise for price/value stability will be kept in this system.
Regardless, Marcus asserted that Libra needs to keep its options open to anything, as the end game is to create a more efficient payment system for the world.
Still Eyeing 2020 Launch
Following the seminar, Reuters spent some time in discussion with the Libra executive. When asked about the launch date of 2020, Marcus asserted that June 2020 is still something his team is eyeing, but admitted that such a goal may be nigh impossible to realize due to regulatory setbacks and constant critique from the world’s powerful:
“[June 2020 is] the goal. We’ve always said that we wouldn’t go forward unless we have addressed all legitimate concerns and get proper regulatory approval. So it’s not entirely up to us.”
Indeed, the Group of Twenty (G20) nations recently began discussions regarding global cryptocurrencies in evident response to Libra. According to Reuters, those involved in the meetings, including finance chiefs from the world’s largest nations, asserted that stablecoins, while potentially beneficial to financial inclusion and such, pose risks related to “money laundering, illicit finance, and consumer and investor protection.” Thus, the G20 is purportedly looking to move to ensure that Libra doesn’t launch before everything is ironed out. As Bank of Japan Governor Haruhiko Kuroda said:
“Policymakers have expressed concerns over various risks stablecoins pose. Until they are addressed, stablecoins should not be issued. That was something agreed by the G20 members.”
In a meeting whose transcript and audio recording was leaked to media, Mark Zuckerberg told his team that Libra is “going to be a long road. We kind of expected this,” in reference to the scrutiny the project faced. In a public interview with the Nikkei Asian Review, Zuckerberg continued to tout this line, stating that Facebook & Co. are not entirely dead set on the 2020 launch date, before adding that it is his firm’s responsibility to address concerns and issues before rolling out a potentially society-changing product.