John Collins of FS Vector joins FRT to discuss the Libra White Paper 2.0 and key updates in the initiative, against the backdrop of various developments with central bank digital currencies (CBDCs).
John discusses the several major changes that the Libra Association have set out in their refreshed white paper, addressing some of the intense pressure that their initial June 2019 version drew from central banks, regulators, political leaders and some financial institutions, among others. We discuss the substantive updates that have addressed some of those criticisms – such as new single currency Libra Coins and the detailed focus on compliance with anti-financial crime regulations—as well as those where debate is likely to continue.
The first Libra white paper was a major flashpoint in 2019 and triggered the G7 to create a working group to examine the proposal and stablecoins in general, with the notion of a trans-national currency created for Facebook’s two billion customers raising significant concerns on monetary policy and the potential loss of control by sovereign governments. The Libra 2.0 re-boot has committed to creating single currency Libra Coins for major markets including USD, EUR, GBP and SGD, and it commits to working with central banks who are creating their own CBDC. We discuss how this amended approach may be perceived across different markets, as well as the wider landscape for digital currencies, which is very active with CBDC developments and debates in China, the UK, the US and other economies.