Facebook’s David Marcus said yesterday he was open to pegging the digital currency, Libra, to various fiat currencies, rather than the “synthetic” basket of currencies currently proposed.
“We could do it differently,” the Libra overseer said at a panel Sunday, according to Reuters. “Instead of having a synthetic unit ... we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stablecoin, etc.”
Facebook’s original plan was to peg Libra to a “basket” of various fiat currencies in order to hedge against volatility. But critics observed that the effect could undermine those currencies.
Thus Marcus has suggested a different tack. “We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form,” he reportedly said at Sunday’s panel. “That is one of the options that should be considered.”
The Facebook-led project has attracted controversy for its plan to issue the digital currency, Libra, from a Swiss bank account governed by a consortium, the Libra Association, composed of 21 companies. Broad backlash from lawmakers over the past month has led to several of Libra’s most prominent backers, including PayPal, MasterCard, and Stripe, abandoning the project.
Marcus told Reuters that the Libra development would nevertheless continue, and that introducing Libra as a “series of stablecoins” was a hypothetical and not to be taken as a new direction.
Marcus’s comments come as stablecoins in general fall under more scrutiny, with recent reports from both the G7 and the G20 raising concerns around money laundering, user privacy, and terrorist financing. At the same time, banks globally have begun to roll out serious plans to develop the technology—including the Bank of England and the central bank of North Korea.
Marcus reportedly reiterated his commitment to launching the digital currency by the end of 2020. Facebook CEO Mark Zuckerburg is expected to appear before congress to discuss the project later this month.