Facebook unveiled plans in June for Libra to be backed by a basket of currency assets
San Francisco: PayPal is cautious about the future of Facebook-backed cryptocurrency Libra, which is slated to debut with the pioneering digital payments firm as part of its oversight association.
International outcry is mounting over Libra – with central banks, governments and regulators railing against Facebook’s upstart cryptocurrency and questions over how it would be regulated.
The social media giant unveiled plans in June for Libra – which will roll out in 2020 – to be backed by a basket of currency assets to avoid the wild swings of Bitcoin and other virtual units.
“It’s a non-binding commitment,” PayPal investor relations vice president Gabrielle Rabinovitch said Thursday of the California-based company signing on to the Libra Association.
“And obviously, I think there’s a lot of work to happen before we get to that point where it becomes something more than just a very exciting idea.”
The nonprofit Libra Association, based in Geneva, will oversee the blockchain-based coin, maintaining a real-world asset reserve to keep its value stable.
Facebook envisioned Libra as a new global cryptocurrency, pledging to deliver a stable virtual money that lives on smartphones and could bring over a billion “unbanked” people into the financial system.
Hundreds of billions of dollars are transferred annually between migrants and loved ones in their home countries, and PayPal is a player in that sector.
“The goals and ambitions of Libra are very consistent with PayPal’s overall ambitions in terms of serving the underserved; democratizing access to capital,” Rabinovitch said.
