Crypto Frontline

Slim Libra Project to be Launched in January

Slim Libra Project to be Launched in January
November 27
12:51 2020

A slim version of the Facebook Libra is expected to be launched in January 2021, according to a recent Financial Times report. The Libra Association, which is the company in charge of issuing and monitoring the cryptocurrency project, will release a digital coin based on the US dollar, signaling some major changes occurred in the meantime.

The main reason comes from the multitude of regulatory pressures arising since the project was made public. Central bankers, lawmakers, and government representatives from all around the world had warned against potential risks to the global financial system and as a result, the Libra project had to be scaled back.

Libra Association to apply for FINMA approval

Considering the Libra Association is a company based in Switzerland, FINMA, the main regulator in the country will have the final say on whether the project will receive the green light. Based on the latest reports, the intent for receiving approval had already been submitted and the regulator will need to provide a response.

Earlier this year, even Swiss authorities criticized Libra and with pressure expected to come from abroad as well, the decision will be difficult. Would launching a slimmer project persuade regulators into allowing passage for the Libra cryptocurrency?

Under the new plan, a dollar-backed coin will be first in line, with other tokens backed by other traditional currencies to be released at a later date, based on the information provided also by Financial Times.

Could this have any impact on the crypto market?

When the Libra project was initially rumored, the cryptocurrency market reacted impulsively and there was a major rally during the first half of 2019. Markets reversed course once regulatory pressures increased, but now that the project could be finally launched, the market reaction should rather be muted.

On one hand, we should consider that plans had changed as compared to a year ago and it could take another few years until Libra will be available for a large audience. On top of that, the market is focusing on other factors right now, with the most important one dealing with the increased interest from the institutional side, which is assumed to be the main driver of the current bull run.

At the time of writing, cryptocurrencies are still retracing from the highs after reaching extreme overbought conditions. The Libra news did not have any influence on the market, which is why we suspect technical will continue to drive momentum in the near term.


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