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Facebook: could the Libra project fail?

A few days ago, Ueli Maurer the president of the Swiss Confederation spoke of a failure of the project for the establishment of Libra la stablecoin of Facebook, at least as proposed from now on in its current form.

The declarations from the Swiss President are considered to be important, because the association for the stablecoin Libra arises right on the territory of Switzerland.

Not only, Maurer is also the head of the finance department of the federation of the Swiss country, and this makes him one of the most informed people on the facts.

The problem, raised by the president, lies mainly in the basket of currencies that have been chosen regarding the adoption by Libra tokens, namely: the dollar, the pound, the Japanese yen, the Singapore dollar and the euro. 

In fact, when asked about Libra's future possibilities, the president said that: I don't think it's possible, as it is the currency basket chosen to support this stablecoin sees the various national banks opposed by its issue. With the negative response from these institutions, inevitably the Libra project, with this current model has failed. 

The president added nothing to his statement, but his doubts are more than legitimate as well as shared by other politicians. For example, during the hearing of the Libra Project Director in the United States at the Senate headquarters, political representatives doubtful asked who to base on this stablecoin on a vast basket of currencies was it a good idea or not?

So the doubts about the basket of cryptocurrency chosen could inevitably lead to the failure of Facebook's Libra project, as well what it looks like at the moment. 

Its developers and supporters, however, could overcome this problem by creating five tokens dedicated each to a FIAT currency. Instead of create a single token for five currencies so different from each other. 

At the moment, da part of the Libra association no note has been received yet. So even if there are many doubts from institutions and politicians, the project seems to be continuing the same.

In addition, in the last period, Facebook and the Libra association are repeating that it will not be a real currency, but that it will be more of a payment system, which will in any case provide for the receipt of approval by the various entities involved.

In a tweet for example it has been written that: The Libra project will be supported by a reserve which will be created in order to maintain its stable value. 

In this message, published a few weeks ago, there is therefore no mention of the number of currencies, the basket that will be used, etc ... but the only thing that reveals is the existence of a reserve fund for keep its value stable. 

In any case, even if the project is said by many to be close to bankruptcy, it seems that the Libra Association is still looking for a solution that can lead to its approval in full by the various regulatory bodies involved. 

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Silvia Faenza

Graduated in Political Science and International Relations at the University of Salento, in the 2014. From 2015 he is in charge of content management for online companies and publishing agencies, mainly as a ghostwriter, copywriter and web editor.

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