Facebook-Spearheaded Libra Cryptocurrency May Finally Debut in January 2021

The good news for Facebook’s Libra digital currency initiative is that its long-awaited debut appears to be imminent. The bad news is that Libra will likely emerge in a format that is heavily scaled down from its original plans. Hannah Murphy of Financial Times reported this past weekend that Libra will roll out in January, citing three unidentified people involved with the project, but it will debut in the form of one coin based on the U.S. dollar, rather than the initial plan of digital versions of several currencies. Facebook declined to comment on the report. The initial plan, according to the Libra White Paper, was to roll out a multicurrency Libra coin as a complement to existing currencies, and not as a competitor. Concerns over potential interference with monetary sovereignty and policy if the use of Libra reached significant scale promoted the addition of single-currency "stablecoins" tied to currencies including the Euro, the Singapore dollar, the U.K. pound and the U.S. dollar. Murphy reported that the multicurrency coin and the single coins tied to the other currencies were still on the table and would be rolled out at a later point. The debut date for the scaled-down Libra offering is dependent upon approval by the Swiss Financial Market Supervisory Authority for it to operate as a payments service. Facebook introduced Libra in June 2019, saying at the time that Libra would be controlled by founding members of the Libra Association, with Facebook having the same single vote as those other members and not in a controlling position. The company also introduced a subsidiary company to oversee its cryptocurrency efforts, Calibra, saying that Facebook users’ data would never be mingled with Libra payments. Libra came under fire almost immediately, as the month after the initiative was revealed, several Democratic members of the U.S. House Financial Services Committee published an open letter in July 2019 to Facebook’s executives asking them to “immediately agree to a moratorium” on the project. They wrote, “Because Facebook is already in the hands of over one-quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action. During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so risks a new Swiss-based financial system that is too big to fail.” The Libra Association began losing members at an alarming rate last October, with Booking Holdings, eBay, Mastercard, Mercado Pago, PayPal, Stripe and Visa bowing out, followed by Vodafone in January. Some good news came in February when ecommerce stalwart Shopfiy became a member of the Libra Association. Facebook revealed in May that its digital wallet for the Libra cryptocurrency collective was renamed from Calibra to Novi.