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Crypto-capitulation: Facebook Might Tie Libra to National Currencies

(Image credit: Wit Olszewski/Shutterstock)

Surprise! Facebook might be open to changing its plans for the Libra cryptocurrency to appease regulators. Facebook's David Marcus reportedly said on Sunday that the company "could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc." rather than a synthetic unit. That concession might help alleviate some of the fears associated with Facebook having its own currency.

Libra attracted scrutiny almost immediately after its revelation in June. Facebook envisioned the currency as part of a broader initiative, Calibra, through which its first goal would be to offer "a connected wallet for a connected world." Both entities would technically be separate from Facebook proper-- but only on paper. Calibra would launch its digital wallet on Messenger, for example, and Facebook is well-known for carefully managing the supposedly independent subsidiaries it sets up.

Regulators have expressed concern about Libra being used for criminal purposes, said it could endanger people's money and accused it of undermining "monetary sovereignty." All that scrutiny has taken a toll: major companies like PayPal, Visa, Mastercard, Stripe and eBay all pulled out of the Libra Association earlier this month, before it had even held a single meeting. 

Reuters said that Marcus, who leads Calibra, was speaking to a panel at a banking seminar about Libra on Sunday. He told attendees that switching to "a multitude of stablecoins that represent national currencies in a tokenized digital form" is "one of the options that should be considered." It wouldn't be Facebook's preference, he told Reuters, but Marcus said Libra would have to "demonstrate a lot of agility." Fitting, given that Facebook's motto used to be "move fast and break things."

Unsurprisingly, Marcus pushed the blame for any potential Libra delays onto regulators.

"We've always said that we wouldn't go forward unless we have addressed all legitimate concerns and get proper regulatory approval ... so it's not entirely up to us," he said.

Facebook wants to introduce the cryptocurrency by June 2020, which means regulators would have to do an about-face on the project within a few months. Assuming, of course, that Facebook deems their concerns legitimate.