Facebook’s Libra cryptocurrency is gearing up to launch as early as January in 2021. The company is citing that three unidentified people are involved in the project.
The Geneva-based Libra Association will govern and help Libra to launch a single digital coin backed by the dollar. When Libra cryptocurrency was unveiled, it was supposed to be a brand new currency tied to a set of fiat currencies and securities.
Many banks and regulators have been concerned about this vision. That is the big reason why the Libra Association changed the direction and started working on a set of single-currency stablecoins.
Libra was re-launched in a slimmed-down version after regulators globally raised concerns it could upset financial stability and erode the mainstream power over money. The Libra Association, a part of a group of which Facebook is one of the 27 members. It is seeking permission from Switzerland’s markets watchdog to issue a series of stablecoins financed by traditional currencies, as well as token-based stablecoins.
Stablecoins are cryptocurrencies that don’t fluctuate in value against a specific fiat currency and are designed to minimize the volatility. For example, always one unit of a USD-backed stablecoin is worth one dollar.
As per the plan, other coins backed by traditional currencies will be introduced later. FINMA (Swiss Financial Market Supervisory Authority) did not confirm in April the receipt of Libra’s application for a payments license.
Stablecoins are created to avoid the volatility of cryptocurrencies such as bitcoin, making them suitable for payments and money transfers.
Facebook will most likely launch its own Libra wallet also at the same time. Originally called Calibra, the Facebook subsidiary has been rebranded to Novi back in May.
Along with the app that will let users send and receive Libra tokens, they will be able to manage user Novi account from Messenger and WhatsApp. Facebook hops the people will start using Novi for remittance purposes and peer-to-peer payments.
It’s unclear whether other companies like Farfetch, Lyft, Shopify, Spotify, and Uber also plan to launch their own Libra-based service at the same time.