It is well known that Central Banks do not like Libra very much. The truth is the appearance of cryptocurrencies lower the power of central banks; and, thus, it is very unlikely that they will support the cryptocurrency– at least until society accepts them first because once everybody is using something, in this case a cryptocurrency, the central bank will need to adapt.
On the other side, cryptocurrencies’ creators know that while they will not get the support of central banks, it is important that, at least, they are not very warring. With this goal, Facebook has changed the white book of Libra.
The idea behind Libra is to create a cryptocurrency backed up by several currencies such as the American dollar, Singaporean dollar, Euro, Sterling Pound, and others. As a result, Libra has been classified as a “stablecoin” which means that this currency will try to get a stable flow of prices in opposition to other cryptos like Bitcoin or Ethereum whose prices changes greatly each day.
It seems that this concept is too powerful for the central banks, and they have asked Libra creators not to interfere in the economic policies related with each country currency. The way to do it is by creating a kind of Libra’s subsidiaries only backed up by one currency. For example, in the UK, the Libra from Facebook would be only backed up by the Sterling Pound.
This seems like a step back for Libra’s creators because it will lose its original approach.
The changes, and also likely the COVID-19 crisis, have delayed Libra’s launch that was programmed for June 2020, and now the end of the year seems more realistic.
Conclusion
Cryptocurrencies were born to avoid banks and central banks, but regulations will not allow it. The game of the currencies is still very important in order to manage different events. For example, if a government needs to send money to its citizens because of the COVID 19 crisis, this government can ask for money from other countries or just produce more money, devaluate its currency, and be independent. Of course, currency devaluation has significant repercussions; but it is a tool like any other with its strengths and weaknesses, and governments do not want to renounce to it.
Libra is working to be recognized, licensed, and absolutely legal. It is one of the most serious projects among the cryptocurrency world, and it may be the first one that really achieves to be generally used.