Facebook is reportedly considering the use of national currency-pegged stablecoins for its upcoming Libra project.
David Marcus, head of the Libra initiative for Facebook and CEO of Calibra, a company developing a wallet service for the social media firm’s cryptocurrency, stated that Libra might use several different fiat-based stablecoins, instead of a single token.
While attending a banking seminar on October 20, Marcus noted that the primary objective of the Libra project was to create a more efficient global payments system and that the initiative’s developers were not opposed to exploring alternative approaches.
“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.”
The project’s developers had initially proposed backing the Libra token with a basket of several national currencies including the US dollar, euro, Japanese yen, British pound and Singapore dollar.
Marcus mentioned that the aforementioned stablecoins were not the Libra Association’s preferred option, however, the project’s developers must remain flexible.
Several major corporations have withdrawn from the Libra Association, including digital payments and e-commerce companies such as PayPal, eBay, Mastercard, Visa, and Stripe.
US Treasury Secretary Steven Mnuchin said that the companies left the Libra Association because the project was not “up to par” with US anti-money laundering (AML) standards.
Libra continues to face pressure from regulatory authorities throughout the world. Lawmakers and politicians have expressed concerns regarding the stablecoin project and its potentially adverse effect on the global financial system.
Finance ministers and central bank heads from the G20 member nations have raised concerns that global stablecoins might threaten the monetary sovereignty of states, especially in developing nations. On October 18, German federal minister of finance Olaf Scholz stated that regulators must stop the Libra stablecoin’s development.
Facebook CEO Mark Zuckerberg is expected to testify about the Libra project before the US House of Representatives Financial Services Committee on October 23.