Facebook’s Libra could be backed with fiat-pegged stablecoins

• Libra developers are open to ideas that will see Libra demonstrate agility.
• June 2020 is still a possible launch date for Libra but delays could occur due to regulation hindrances.

Facebook is considering using stablecoins representing the value of national currencies to back its proposed digital currency, Libra. According to a report by Reuters, David Marcus, the co-founder of the project told the audience at a banking seminar group on October 20. Marcus who heads Libra said that Facebook is still open to ideas that will promote efficiency.

“We could do it differently,” Marcus told the panel. “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.”

He continued:

“We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form,” he said. “That is one of the options that should be considered.”

As Libra developers hunt for ideas to make Libra agile, Facebook is still facing scrutiny over the project whose potential leaves central banks in jitters. Besides, the Finance Ministers from the G20 group of countries last Friday said that stablecoins pose great risks to the global financial systems. For this reason, regulations must be put in place before allowing such digital assets to operate.

Marcus still believes a June 2020 launch is possible. However, he acknowledges that there could be delays mainly because of regulatory restrictions.

“We’ll see. That’s still the goal.” He added, “We’ve always said that we wouldn’t go forward unless we have addressed all legitimate concerns and get proper regulatory approval. So it’s not entirely up to us.”