The Libra would be a stable coin and would be released in January. Its value would be covered by the US dollar.
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Facebook’s digital currency project, Libra, will be released in January and its value will be backed by the US dollar.
According to the Financial Times, a year and a half ago, Facebook wanted to introduce a cryptocurrency similar to Bitcoin, which it called Libra, after some companies like Visa and Mastercard pulled out of the project and voiced concerns from some banks and financial institutions. Alongside the European Union, the Libra Association introduced changes last April that made Libra more of a PayPal payment system.
This project has yet to be approved by FINMA (the financial market supervisory authority based in Switzerland). Now it doesn’t seem like a payment system that will be launched in January 2021, but rather a stable coin.
A stable coin is a virtual currency that is much less volatile than cryptocurrencies like Bitcoin because its value is fixed. In this case it is covered by the US dollar. Therefore a scale would be worth the same as a dollar. That is, its value depends on what the dollar is worth.
The launch would only take place in the US and some Latin American countries. According to sources, the goal is to offer a cross-platform payment system with the currency. With a stable coin, it is easier to get approval than given the volatility of a cryptocurrency. The project would also include the Novi (formerly called Calibra) digital wallet, which can be used to purchase and operate stable coins via WhatsApp and Messenger, for example, to enable the new cryptocurrency to be sent, received and managed.