The Libra Association has just brought a slight change in their plan and according to their new plan they want to develop a handful of stablecoins each representing a different fiat currency. In that case, libra coins can be tied with different fiats.
This new plan limits Libra’s flexibility. This new pivot will make governments and central bankers think especially those who were hesitant of the previous plan. There was question around the world about how would they aptly regulate digital payments and digital currencies when the original white paper was first released.
Libra earned regulatory ire in developed world at its first launch back in 2019. But they made some change in their way of goal which came into force in early 2020 and they are committed to their goal of being ready to launch in 2020.
New Appearance of Revised Libra White Paper
LRB has use in cross-border settlement coin and a neutral, low-volatility option for businesses and countries having no single-currency stablecoin. The cardinal job of Libra is now to serve to make existing currencies easier to use.
They have always been there to complement fiat currencies not to compete with them. The multi-currency Libra Coin makes sure monetary sovereignty and monetary policy if large volume of domestic payments is made in.
Every stablecoin will be backed by a reserve of high-quality assets and short-term government securities as it thought to improve nearness to central banks and public institutions. Major currencies are expected to be digital with the touch of it.
Libra has an explicit plan to become permissionless beginning in the subsequent five years but the authentic white paper conceived Libra embarking on as a permissioned network. All counterparties operating nodes in the Libra network will remain known to all others.
The new idea refers to the model that has the best qualities of permissionless system with the counterparties of know-your-business and know-your-counterparty. The revised white paper makes the roadmap more compliant with regulatory recommendations from Financial Action Task Force (FATF) limiting the ability of unregulated parties.
First in Switzerland
Libra Association has begun the licensing process with Switzerland’s Financial Markets Supervisory Authority (FINMA). FINMA will allow it to offer monetary and banking services.
Libra said the group is willing to register as a money services business with the Financial Crimes Enforcement Network and reportedly meanwhile, Facebook’s blockchain subsidiary, Calibra, has alos been registered as money service business.
Development of Blockchain
Libra Association is working for the buildout of the blockchain and the technology supporting this and flattening all the impediments to entry in the network to the open source world. Libra will never be a truly open network as per Libra but many in the industry would say a classic centralized system would work better.
This peer to peer payment element is only feasible under a blockchain architecture and this scalable peer-to-peer payment network doesn’t sacrifice security.