Project could use multiple coins pegged to national currencies rather than a single synthetic cryptocurrency, Facebook says, as regulatory pressure mounts
Facebook said on Sunday it is open to alternative approaches with its controversial Libra cryptocurrency project, including issuing multiple coins linked to different national currencies.
David Marcus, head of the Libra project at Facebook, told a banking conference there were mulitple ways the company could attain its goal of creating a more efficient payments system.
“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,” Marcus said, according to Reuters.
“We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenised digital form… That is one of the options that should be considered.”
Marcus said he did not mean to suggest that currency-pegged stablecoins were now Facebook’s preferred option, adding that Libra needed to show “agility” in its approach.
The project was hit by its most serious setbacks yet this month after payment providers Visa, Mastercard, Stripe and PayPal all left the Libra Association.
Booking.com and eBay are amongst the other initial backers to have withdrawn from the project amidst a hostile response from governments and regulators.
Facebook initially planned Libra as a synthetic currency tied to a range of real-world assets in order to provide stability.
But authorities fear such a digital currency could create opportunities for money laundering while harming user privacy and the stability of existing national currencies.
On Friday the G20 group said stablecoins such as Libra should not be issued until a range of issues had been addressed, and planned strict regulations on cryptocurrencies.
Meanwhile, banks have shown little inclination to join forces with Libra, with J.P. Morgan chief executive Jamie Dimon on Friday calling the project “a neat idea that’ll never happen”.
But others have acknowledged that Facebook’s plans have had a salutary effect in shaking up the payments industry.
Felix Hufeld, president of BaFin, Germany’s financial regulator, said over the weekend he doesn’t think Libra is “dead in the water” and is unlikely to go away any time soon.