When Facebook’s Libra foundation was established last year it was met with a mixture of optimism and scrutiny.
Die hard cryptocurrency supporters hated the idea of a centralised currency while traders and investors were delighted as it was another driver for mainstream adoption.
Regulators and governments took a colder view on Libra, with Mark Zuckerberg having to be present for a hearing at the House of Representatives in October.
The Facebook founder suffered a tirade of criticism from the likes of Congresswomen Alexandria Ocasio-Cortez, who lamented the 35-year-old over Facebook’s controversial ad policy.
Libra makes progress
Fast forward one year and Libra has released version 2.0 of its whitepaper, in which it states that it will have a series of stablecoins linked to national currencies rather than a single digital coin.
eToro CEO, Yoni Assia, revealed the positives and negatives of the updated whitepaper, hailing it as progress being made.
“The Libra foundation recently released version 2.0 of the much-debated initial whitepaper, delineating their vision of making global financial infrastructure accessible.” He said.
“The initiative was initially scrutinised by regulators, fearing the impact an extra-territorial currency format would have on domestic monetary policy.
We have initiated the formal payment system licensing process with @FINMA_media and updated our white paper to reflect key design changes to the Libra payment system. https://t.co/jiGnufzOtj#FinancialInclusion #TechforGood pic.twitter.com/1zdwoalG8I
— Diem Association (@DiemAssociation) April 16, 2020
“The main changes in the new paper, which seem to take into consideration the regulatory challenges, are:
- Permissioned at first
- Stablecoins
- Regulated nodes (VASPS)
“The main downside of these changes is that the system is less open, and less decentralised, therefore the Bitcoin community will probably disregard this as another centralised project.
“We believe these changes make significant progress in enabling Libra to potentially launch. They are now taking a more regulated approach, as we discussed in our position paper, published in November last year, where we recommended a shift towards working with local regulated institutions in supporting transactions in national currencies.”
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.