After a long wait, Facebook’s digital currency, Libra is finally set to launch. According to people involved in the initiative, the launch will be in an even more limited format than its already downgraded vision.
The exact launch date would, however, depend on when the project receives approval to operate as a payment service from the Swiss Financial Market Supervisory Authority. But sources say it could come as early as January 2021.
Libra could have a massive effect on Bitcoin
The news comes as Bitcoin, the original cryptocurrency, reaches a record high of nearly $20,000 this week, amid increasing interest in digital currencies from professional investors and regulators.
The impending launch of the Libra could significantly sway the crypto ecosystem as the coalition of the Facebook-led Libra group pulls huge traction across the world.
Although it’s too early to gauge the kind of effect it could have on Bitcoin trading, Libra could be massive enough to halt the bullish run of Bitcoin and possibly become its biggest competition in the crypto space.
The initial announcement of the Libra in 2019 led to Bitcoin Price rising to a 12-month high of $9,477 in the 24 hours that followed, according to Market insider. Other cryptocurrencies such as Ethereum and Ripple also responded positively.
However, Coindesk reported that the Libra had no significant effect as Bitcoin trade was flat in the four hours that followed the release of the white paper.
Whichever way the Libra’s launch sways the Crypto ecosystem, Bitcoin’s strong foundation could mean that Bitcoin will have more effect on Libra than the other way round in the long run. This is mainly because of the increased investor confidence in Bitcoin due to the huge shift from cash towards digital payments and because Bitcoin has proven to be tested and trusted over time.
Here is a quick recap to better understand how libra has evolved since the initial announcement in 2019.
The planned initial launch of the cryptocurrency in 2019 hit a snap after concerns arose from regulators over its initial plan to create one synthetic coin backed by a basket of currencies.
Regulators especially in the US and France warned that the global crypto adoption could threaten monetary stability and become a hotbed for money laundering.
The blowback on the project from regulators led to scaling down of libra’s vision and a corresponding exit of some of its founding members including PayPal, Mastercard, Vodafone, and eBay.
Also, Libra came under fire for its close association with Facebook, which has faced multiple privacy scandals. Some analysts have pointed to Zuckerberg and Facebook’s reputation as one of the leading reasons for Libra’s many critics.
Addressing regulator concerns, the 27-strong Libra Association announced in April that it had planned to launch digital versions of several currencies, plus a “digital composite” of all of its coins.
However, the Facebook-led coalition has now resolved to initially just launch a single coin backed one-for-one by the dollar. The other currencies and the composite would be rolled out at a later point.
According to the Financial Times, Libra has submitted an application to operate as a payments service in May. And the exact launch date would depend on when the project receives approval from the Swiss Financial Market Supervisory Authority.
In summary, the launch of Libra will finalise Facebook’s push into cryptocurrency and further promote optimism that digital currencies could become widely accepted by consumers large companies.
PayPal, which was the first founding member to drop out of the libra initiative, announced last month that it would launch support for cryptocurrencies, including checkout.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!