Facebook’s Libra cryptocurrency has been a hot topic within the FinTech community and regulators from the world’s powerful economies. Recently, the project suffered setbacks after major partners like PayPal, Visa and Mastercard considered opting out of the Libra Association.
Governments have also expressed their skeptical sentiments on Libra’s development with most arguing that it would disrupt the financial system. This has left the project with a few enthusiasts defending and looking for solutions to make it acceptable in today’s fiat and digital asset economies as well. During the just-concluded TechCrunch Disrupt, a16z’s Crypto, Chris Dixon who is a partner at the firm noted that pegging Libra to the U.S dollar would make it appealing to regulators.
The digital asset is currently set to be pegged to more than three currencies with the U.S dollar dominating the basket. In doing so, Libra aimed at achieving a stable value coin that would suffer minimal effects in case one of the basket currencies is volatile at a point in time. Libra’s team is expected to give a way forward after a meeting set for mid-October. The highlights will include creation of charter, board elections and probably a hint on which currency will dominate Libra given the recent unfolding.
Libra’s team lead by David Marcus from Facebook have constantly disputed the perspective that they are creating a new currency. Instead, he argues that it will be a digital asset operating on top of the existing currencies. The idea of pegging Libra to the U.S dollar only would make the digital currency fall short of maintaining a steady value as per its current design. Furthermore, Libra will now be competing with U.S dollar pegged crypto coins like Tether.
Despite the challenges in adoption, Dixon added that Andreessen Horowitz has set up a crypto start-up school that will equip blockchain entrepreneurs with the necessary skills at zero equity.