Facebook has said that its Libra cryptocurrency platform will now support various versions of digital coins, most of which will be backed by individual fiat currencies like the U.S dollar. This is part of the changes the social media giant and its partners made to soften the stance of critics globally.
The Libra Association, the supervising body that oversees the proposed project, remodelled the currency and made other upgrades in response to financial regulators’ concerns that the Libra project could undermine the power and control of central banks.
When Facebook created Libra, it planned to create a single global legal tender that would be pegged to a basket of popularly used currencies like the Euro, U.S dollar, Japanese yen, and fixed income assets like treasuries.
That project faced a lot of backlash from politicians and regulators concerned that Libra could take over some authority from global central banks, which use currency creation as a tool to control and stabilize markets or be used for illicit purposes, such as money laundering.
After several discussions, the Libra Association has pulled back on those initial plans, though it still plans to design a version of the Libra money made up of a digital composition of some of the single-currency stable coins.
Facebook has assured its critics that it will not launch Libra without regulatory approval, but it’s not clear if the changes made will satisfy critics and financial stakeholders.