Facebook Scales Back Libra Ambitions

Rest easy, U.S. dollar. For now, nothing is replacing you as the world’s reserve currency.

Yesterday, Facebook formally announced a less ambitious launch plan for Libra. Whereas FB initially envisioned Libra as one stablecoin pegged to a basket of currencies, the digital payment project will move forward with multiple coins pegged to local currencies, like the euro or the dollar.

• Another notable change: Libra will be a closed system, not open-source and permissionless like bitcoin.

Last October, major payment processors including Visa and Mastercard pulled out of the Libra Association following resistance from regulators on multiple continents. Despite that attrition, Shopify and crypto startup Tagomi have recently joined the association.

Would you look at that timing?

On Tuesday, the international Financial Stability Board (FSB) said stablecoins could undermine global financial stability without suitable regulation.

Libra has already succeeded in at least one way, though. It’s a kick-in-the-rear for central bankers to take digital currencies more seriously. China’s central bank plans to release its own, and dozens of other countries are interested as well.