The Libra will not after all be a brand new global digital currency, but a cryptocurrency based on existing currencies, such as the euro.
The Libra association, which is in charge of leading Facebook's digital currency project, on Thursday 16 April presented an amended version of the project, intended to respond to concerns raised by European and global regulators.
In a statement, the association said it had worked hand in hand with policymakers to propose this new system of "'stablecoins' based on specific currencies in addition to a composite Libra currency". The association offers reassurances that it has reinforced the security of its project to avoid any risk of diversion for money laundering or terrorist financing purposes.
From the outset, the Libra project has caused an outcry from regulators and governments. Some of its original partners have even decided to leave the project.
On the European side, the Council of the EU and the European Commission adopted a declaration in November 2019 stating that no worldwide cryptocurrency could be legal tender in the EU until regulatory challenges and risks had been identified and addressed (see EUROPE 12365/4).
During his hearing before the US Congress (see EUROPE 12356/14) in October 2019, Facebook boss Mark Zuckerberg had already left the door open to a revision of the initial draft.
The Geneva-based Libra association submitted its application to be a "payment system" to the Swiss financial regulator, Finma, on Thursday and hopes to launch its currency by the end of the year. It remains to be seen whether this new version will be suitable for regulators this time.
To view the updated White Paper: https://bit.ly/2KiVFW5 (Original version in French by Marion Fontana)