It may not have come to many people’s attention last week in the midst of on-going concentration on the Pandemic, but Facebook quietly scaled back its ambitions for its Libra crypto-currency.
Picked up by The New York Times at least, it seems Facebook and its partners have accepted their original, very ambitious plans needed to be adjusted in the face of what the paper describes as “numerous hurdles and heavy regulatory scrutiny”.
Gone: any (overt) plan to make the system, which would have relied heavily on robust Digital Identity, the basis of a new global financial system where Mark Zuckerberg could become just as big a force in finance and he seems to be in publishing and social networks.
Instead, the new Libra will be more about the creation of a much more traditional payment network in which coins will be tied to a local currency, like the digital dollars in a PayPal account, states the story.
And while the system will also have a coin backed by multiple national currencies, a central pillar of the initial design documents, that will be less prominent, according to new documents published by the group Facebook set up to drive the initiative, the Libra Association.
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Specifically, in a new Libra white paper on the Association’s site, multiple coins, each backed by a different national currency, will be created in order to make local commerce easier. (A separate coin backed by multiple currencies would be useful for moving money between countries, which had raised many a central banker’s hackles.)
Libra’s backers are also abandoning plans to work like Bitcoin, and so avoid another big problem – the latter’s so-called permission-less quality that allows anyone to build on it, which had led to widespread concerns that terrorists and others could use Libra for nefarious reasons.
Libra will now be a closed system in which only partners with the approval of members can build infrastructure, such as wallets, for the coins.
Of course, it is worth noting that while some genuine fears around a new rival to the dollar that seemed to be the secret aim of Libra have now been assuaged, the original problem – that 31% (1.7bn) of us humans don’t have access to traditional bank accounts – remains unresolved.
