According to a report from Financial Times, Libra`s regulatory issues may be resolved and it may receive clearance for the launch of Facebook`s first US dollar-backed stablecoin, which is scheduled for the beginning of 2021.
The report from the news outlet cited three individuals involved in Libra’s development, which consider January 2021 to be a possible date to start Libra`s journey, albeit in a scaled-down version. Libra Association’s initial plans were to launch Libra in mid-2020 with several currencies backing the stablecoin, but regulatory scrutiny forced Facebook to delay the launch.
However, Libra’s plans still include more fiat currencies to be added as a way to back the value of the new stablecoin. For now, Libra would start as a 1:1 U.S. dollar-backed stablecoin, which is in conjunction with Facebook announcing a shift in the orientation — from a basket-backed cryptocurrency to creating several stablecoins, which would be regulatory compliant with each and every jurisdiction. Initially, Facebook’s Libra was planned to be backed by a wide basket of fiat currencies, including the U.S. dollar, the Euro, the Japanese yen, the British pound, and the Singapore dollar.
Тhe decision when to release the new stablecoin lies with the Swiss Financial Market Supervisory Authority, or FINMA, which has to approve Libra to act as a regulated payment service. FINMA refused to give clarification on the subject, citing a former announcement that “FINMA will neither provide public information on the status of the ongoing procedure nor speculate on when it may be complete.”
Facebook’s Libra stablecoin has put the financial world in a frenzy, with regulators trying to halt the project. Also, several large-scale investors like PayPal, Mastercard, eBay, and Vodafone, abandoned the Libra project due to the regulatory scrutiny that lasted over a year.
In an attempt to meet the regulatory requirements, Libra Association decided that the project must undergo a serious overhaul, which included the multi-currency format shift and some executive replacements. One of the strategic management moves was the appointment of HSBC’s legal Chief, Stuart Levey, as the CEO of the association. Many crypto experts believe that his experience is the key to receiving the much-needed FINMA regulatory approval.