LIBRA FACEBOOK CRYPTOCURRENCY - After its first launch in June 2019, the Libra project, the Facebook’s cryptocurrency, exited the stand-by mode, in hope it will actually come into operation. The Libra Association, during this period of time, worked in order to reach a compromise between the initial objectives and the contrasts the project had immediately faced. A new white paper for Libra 2.0 was drawn up.
Libra is a cryptocurrency, and it was inevitable that it would draw attention, since it was born from the web giant Facebook. Digital currencies are constantly evolving, and Mark Zuckerberg had seen their potential as he tried to launch Libra, a cryptocurrency with which to buy online and transfer money, avoiding the characteristic volatility of bitcoins. However, its aspect of decentralization compared to central banks obviously was something that banking authorities did not like. The concerns of central banks were also due to the high number of Facebook users, that could turn into millions of potential beneficiaries.
Other positive aspects of the money should have been the exclusion of management costs and even the possibility of not having a bank account. However, after the initial launch, the process stopped. The reasons have to be found in the fear that it could represent a threat against physical national currencies. It was crucial to work at a new white paper, to make compromises and review the draft, to bring back news about Libra.
Facebook’s cryptocurrency had to scale back its objectives to get around the contrast with other politics and monetary authorities. Firstly, a cooperation with Finma, the Swiss Federal Supervisory Authority, was initiated. Finma will take part as guardian of the dynamics and modifications to Libra, carrying out controls and approving changements.
The integration of the digital currency, in addition, had to face the issue of volatility. It will remain a relatively stable coin, but it will include more currencies. It will remain a stablecoin based on the blockchain, accompanied by low volatility assets. This will make sure that it will have a certain stability. However, now the cryptocurrency seems to get closer to a sort of digitalization of other currencies. The new is that other digital currencies for various existing physical currencies will be present. Those who own Libra should be able to convert it into another currency. This is how the Libra project should meet the financial authorities' needs, to achieve the proper collaboration for the process to go forward.