Libra, the cryptocurrency proposed by Facebook, has run into a number of hurdles since it was proposed by the social media giant earlier this year. Regulators have clamped down extremely hard on the notion of Facebook launching its own cryptocurrency.
Some of the reasons are sound, while others don’t quite add up, but regardless, Libra is in a position where it needs to pivot if it is to launch in the near future. It should still be applauded that Facebook wants to delve into cryptocurrency and to spread it around a large portion of the global population, but there are other ways.
It is also interesting to note that while Libra doesn’t even exist yet, it is being slated and bemoaned by many. In the US, the particular area of concern is allowing a private entity like Facebook the power to launch a ‘currency.’ With that in mind, it may be worth looking at an alternative provider to provide the stablecoin.
In the world of cryptocurrency, the most well known, and used, stablecoin is Tether (USDT) This stablecoin was created through the exchange, Bitfinex, and has mostly been allowed to run without too much regulatory concern.
The one big caveat to that is there is huge concern surrounding Tether, but more for its bad business practices. On its creation, there was no backlash similar to what has been seen against Libra. So, perhaps if Facebook was to pick up an already established stablecoin and run it through the Calibra wallet?
Perhaps Tether is not the best example, but there are many more regulatory friendly options out there – such as the JPMorgan Coin. This coin is very much still in the pilot phase and is for use between JP Morgan branches, but the point stands that it is fully regulated and accepted so Facebook would do well to pick up some sort of stablecoin like this.
eTorro, the trading platform that has embraced cryptocurrency, also shares this view that Facebook should ditch Libra.
Yoni Assia, CEO, and co-founder of eToro, explains: “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 harmonized and simple regulatory frameworks for the governance of the third parties using the Libra chain for executing payments.”
“The regulatory burden and associated compliance costs would befall those who use the ledger for their own gains, be it in the issuance of collateralized stablecoins, commodities or other financial instruments, effectively removing Libra from the money trail altogether.”