Cryptocurrency trading platform eToroX has told Facebook to drop its Libra plans and focus on third-party stablecoins instead.
The firm recently published a paper which claims that Facebook is likely to run into problems if it tries to launch its own stablecoin offering or press ahead with its plans for Libra.
eToroX launched in April 2019 as a spin-off of the popular eToro trading platform, which currently has over 10 million users. A dedicated digital asset trading platform, eToroX is focused on tokenising traditional assets and growing the digital economy.
Researchers claim that Facebook would stand more chance of launching a successful cryptocurrency project if it focused on existing assets rather than creating its own.
The report points to regulatory uncertainty and legal roadblocks as key reasons for the difficulty Facebook has been having with Libra, instead claiming that the Calibra foundation should focus on supporting existing infrastructure.
If Calibra successfully launches its wallet and payments channels, it could potentially become the largest cryptocurrency infrastructure provider worldwide, with access to over 2.7 billion users.
eToroX’s stablecoin offerings
Of course, the advice could be viewed as self-serving, as eToroX is an issuer of several fiat-backed stablecoins including the euro (EURX), British pound (GBPX), and US dollar (USDEX).
eToroX is also increasing its fiat stablecoin offerings, presumably in a bid to reach customers in multiple jurisdictions worldwide.
eToro CEO and founder Yoni Assia said of Facebook’s Libra project:
“The Libra project is a trailblazing opportunity for radical innovation in financial services. Instead of pursuing a single synthetic asset class, the Libra Association should lobby for harmonised and simple regulatory frameworks for the governance of the third parties using the Libra chain for executing payments.”
As eToroX has seen limited adoption of its stablecoin offerings to date, the advice may imply that eToro is open to working with Facebook to allow users to trade their stablecoins through Calibra infrastructure.
Other officials have also called for Facebook’s Libra coin to be subject to similar regulations as traditional fiat money, such as former People’s Bank of China governor Zhao Xiaochaun, who claimed Libra should be placed under IMF custody.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.