Facebook’s planned crypto currency Libra will be linked to individual national currencies and overseen by global watchdogs in a scaled-back revamp it hopes will win regulatory approval.
The prospect of Facebook’s 2.5 billion users adopting Libra has led to intense scrutiny from global regulators, with many worried its launch could erode national control over money.
Libra’s governing body, which is seeking the go-ahead from Switzerland’s markets watchdog, said on Thursday that it will now offer “stablecoins” backed by single currencies, as well as a redesigned token based on these currency-pegged coins, Reuters reported.
In response, the Libra Association, which will issue the coin and govern its network, said a “college” of central banks, regulators and enforcement agencies from more than 20 countries set up by Swiss watchdog FINMA will have a say in its bid to be licensed as a payments service provider in Switzerland.
The Geneva-based Libra Association declined to give details of the body’s membership and it was not immediately clear how major regulators would respond to Libra’s updated plans.
According to Reuters, central banks have accelerated their research on issuing their own digital currencies, known as CBDCs, in response to Libra, with China closest to launching one as issuance by Western central banks remains a distant prospect.