National Currency-Pegged Stablecoins Are an Option for Libra

Last week could definitely have been better for Libra. Many of the initial members of the Libra Association left the project while there are still some on the verge of following. PayPal’s official departure was just the beginning as a mass exodus due to regulatory concerns followed shortly. Libra is now reportedly open to using national currency-pegged stablecoins for the project’s future development.

According to a Reuters report, the head of Libra’s project and CEO of the wallet service Calibra David Marcus, Libra is now considering the usage of various fiat-based stablecoins instead of the originally developed Libra token.

Yesterday, Marcus spoke at a banking seminar. He highlighted that Libra’s main goal was the creation of a more efficient payment system. He also stated that currently, the project is not opposed to looking at various different approaches. He stated:

“We can take a very different approach. Instead of a synthetic unit, we could develop many different series of stablecoins. We can create a dollar stablecoin, a euro stablecoin, etc. Having many stablecoins representing national currencies in a tokenized digital form is a very real approach we’re currently considering. There are however, more options and nothing is set in stone yet.”

Not just a single national currency was featured in Libra’s initial plans

There was a huge amount of controversy when Libra announced the initial proposed backing for the token. It was allegedly a whole basket of different national currencies including the US dollar, the euro, the Japanese Yen, the pound sterling and even the Chinese Yuan.

When Marcus was confronted about the previously proposed backing, he stated that the Libra Association never preferred that option to begin with. He mentioned that the option was only taken into consideration in order to keep the project “agile”.

The threat of a shadow banking system developed by Libra was mentioned quite often in the last few weeks. The bankers at the Federal Advisory Council (FAC) also declared that there are very high odds of Libra developing such a system if it ever goes live.

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