Libra Might Become Unrecognizable by Navigating Regulatory Concerns

In Europe, China's response to Facebook's crypto project and Libra itself, have sparked some commentators calling on the European Central Bank to adopt a digital currency for the EU. In some ways, it appears Libra has ignited a new currency war, one that might take place in the digital realm, with several counties floating their own central bank digital currencies.

For Libra, the regulatory hassle might constitute only part of its trouble, as the project could face stiff competition from payment giants, especially in China and other parts of Asia.

Single Libra token or individual fiat-pegged stablecoins?As previously reported by Cointelegraph, David Marcus, the co-creator of Libra and head of the Calibra wallet, said the project is open to using various fiat-pegged stablecoins rather than its original idea of creating a token.

The grilling was the latest in a series of appearances by Facebook and Libra before U.S. lawmakers concerning regulatory issues surrounding the project.

"As a member of the Libra Association, we will continue to be a part of this dialogue to ensure that this global financial infrastructure is governed in a way that is reflective of the people it serves. Facebook will not offer Libra through its Calibra wallet until the Association has fully addressed regulators' concerns and received appropriate approvals."

Regulatory concerns might not be the only problem for Libra and its partners.

According to Ralph Hamers, the head of Dutch global financial behemoth ING, Facebook might lose valuable banking relationships due to its involvement with Libra.

The ING chief remarked that banks may choose not to be associated with Facebook once Libra comes online due to money laundering concerns.

Potential for global Libra adoptionEven if Libra obtains regulatory approval, the project still has to contend with achieving widespread adoption in the electronic payment market.

Despite identifying the apparent threat of China's CBDC efforts, Le Maire and other EU policy stakeholders aren't keen on Libra, tagging the project as having severe implications for the monetary sovereignty of countries in the EU. Both France and Germany have expressed a desire to prevent Libra from operating in Europe.