The Facebook libra project, which seemed to have gone comatose because of the stringent guidelines and opposition from several regulators, is now back on its feet. This time, the libra association has reviewed the areas of criticisms, and have made adjustments in the method of deployment, and scope of service.
The initial model was to issue libra coins that will be backed by a multi-currency basket, and financial assets like the US treasury bills. The creators proposed this model because using stable fiat currencies and less volatile securities will prevent unnecessary speculations, like in other cryptocurrencies. With less room for speculation, businesses will focus more on adoption as a means of payment, rather than an investment vehicle.
So what has changed in this new model?
After a series of oppositions from the regulatory bodies, especially in the USA, the Libra association has made significant changes to address the concerns raised by regulators. In the new model, the coin will be pegged against fiat currency and will function as a stablecoin. That means we will have LibraUsd, LibraEuro, LibraGbp.
The new model will also make the libra coin operate like other digital payment platforms like Payoneer, PayPal etc.
According to the team, these adjustments became necessary because of the number of users that already exist on the Facebook network, and mass adoption, without any measure of control, may affect local fiat currency value in unstable economies.
According to CEO and Co-founder of eToro, Yoni Assia, the repurposed model appears to be lacking some vital elements that fundamental crypto enthusiasts would appreciate, e.g. decentralised database system, without direct control by governments. He also stated that the crypto community are less likely to receive centralised projects with enthusiasm.
Note: This post is culled from an original article by Cryptonews
