Facebook Should Drop Libra and Support Third-Party Stablecoins
According to a Nov. 28 report from Finextra, eToro’s blockchain research unit eToroX Labs believes that while Facebook’s crypto project offers a “trailblazing opportunity” to disrupt financial services worldwide, the social media giant needs to change its strategy to assure success.
Facebook should focus on wallet infrastructure
Yet eToroX Labs’ researchers argue that there is still something to fight for in realizing the company’s ambitious aim of embedding a peer-to-peer payment network that could purportedly improve financial inclusion globally.
Facebook could solve its problems by delegating asset issuance to regulated third-party partners, they say.
According to eToro, independent, multiple fiat-backed stablecoins would remove the task of currency control from Facebook, which could instead focus on building its Calibra wallet infrastructure and rolling it out for the estimated 2.7 billion users worldwide across its platforms.
EToro is itself notably an issuer of a range of stablecoins, backed by the U.S. dollar, pound sterling and euro.
The firm’s CEO and founder Yoni Assia said that the Libra Association should lobby lawmakers to provide harmonized and streamlined regulatory frameworks that would cover “the governance of the third parties using the Libra chain for executing payments,” arguing that:
“The regulatory burden and associated compliance costs would befall those who use the ledger for their own gains, be it in the issuance of collateralized stablecoins, commodities or other financial instruments, effectively removing Libra from the money trail altogether.”
Earlier this week, David Rutter, the CEO of enterprise software firm R3, ridiculed Facebook’s Libra announcement this summer as naive and “ridiculously stupid.”
As Libra continues to divide global opinion, the Libra Association is proceeding with development, reportedly logging over 30 projects and 51,000 transactions on the Libra network during the past two months of testing.
Facebook has meanwhile just announced the launch of a new fiat payment system, Facebook Pay, designed to facilitate payments across Facebook, Messenger, Instagram and WhatsApp.