Facebook lost a lot of investors in the Libra Association over the past weeks due to the cryptocurrency not being able to be regulated properly. The Libra Association now wants to turn the cryptocurrency around, which will see it tied to local currency where it will be used for payment. This allows it to be better regulated in the different markets.
Facebook's Libra Association lost a lot of big members the past month. Companies like PayPal, Mastercard, Visa, eBay and Stripe all jumped ship. That was a big loss for Libra, because those 7 represented a large part of their strategic structuring. Members like Mastercard, Visa, eBay and Stripe would have given the cryptocurrency a lot of payment processing power, as well as retail touchpoints so that Facebook could have the scale and size project they want – right from the beginning.
National banks considered Facebook's plans to be part of a dangerous game, circumventing their authority. They don't seem to be against the cryptocurrency, however expect it to fall within the normal legal framework to be regulated like every other currency.
According to TechCrunch, David Marcus, the head of Facebook's Libra project, told a group of bankers that the company's main goal is to create a better payments system and was open to alternative approaches to the original structure of Libra.
David Marcus went on to say that, instead of being based on synthetic units, the Libra currency could be based on a series of so-called stablecoins – "a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc." Facebook wants to start the project in June 2020, and the head of Libra said that's still the goal. If the Libra Association can address these regulatory issues and get regulatory approval, their June deadline might become a reality.
Reuters reported that the G-20 financial overseers wrote in a statement about money laundering, illicit finance and consumer protection need to be evaluated before any stablecoin projects can start.