While there are many cryptocurrency projects that exist within the market, perhaps one of the most ambitious has been Facebook’s Libra token as it marks the company’s foray into cryptocurrency and has led to a wave of increased discussion about cryptocurrency regulation and how crypto will be used in the future. However, the project has seen a lot of pushback from regulators as well as private individuals who either denounced the token altogether or have pointed out possible misuse of the token when it launches in 2020. Despite the best efforts of the Facebook lobbying team, the challenges facing Libra still remain.
According to Switzerland president, the basket of assets that are being used to back the Libra token must be overhauled if it is to see any acceptance from regulators around the globe.
Of all the challenges that have faced Libra, the assets that have been chosen to back it could prevent central bank approval according to Swiss finance minister and outgoing president Ueli Maurer. He went on to say that Libra in its current form has already failed.
The Libra white paper was updated a month ago to eliminate dividends payable to those investors as well as removing the conflict of interest. This is believed to be in response to a new bill being pushed by regulators in the United States that would classify stablecoins as securities. However, Libra is being self-classified as a commodity and not a security and this leads back to the complex classification of digital assets as a whole.
It is also interesting to note the response from the international community to the announcement of Libra as many feel the China’s development of their in-house national digital token was done in response to the upcoming Libra project and even as many more countries are beginning to develop their own national digital currencies, it is questionable just how needed the Libra token will be on the world stage.