The Geneva-based Libra Association that will issue the stablecoin will launch a single digital coin backed one-for-one by the dollar, rather than multi-currency coins.
These moves represent a major cutback in the project’s ambitions and arrives after the project has received intense political backlash, with regulators and central banks around the world raising concerns that it could upset financial stability and erode mainstream power over money.
Stablecoins are designed to avoid the volatility typical of cryptocurrencies such as bitcoin, making them in theory more suitable for payments and money transfers.
The Libra Association, of which Facebook is one of 27 members, is seeking the go-ahead from Switzerland’s markets watchdog to issue a series of stablecoins backed by individual traditional currencies, as well as a token based on the currency-pegged stablecoins.
Facebook first announced plans to create its first cryptocurrency back in June of 2017, promising to make digital money more attractive to everyday users by linking the coins to hard assets, including short-term government securities. Consumers would be able to use the e-coins to make purchases around the world or send money to friends and family, without attaching it to their identity, Facebook said at the time.
Libra’s upcoming launch comes as bitcoin, the most popular cryptocurrency, recently rallied above 19,000 for the first time since 2017. Bitcoin is currently trading just over $16,900.
Facebook’s Libra cryptocurrency is set to make its debut in early 2021.
The digital token from the world’s largest social network could launch as early as January , albeit in a scaled-back form, the Financial Times reports.