Global payment service provider Checkout.com said it would join Libra Association, the entity managing the Facebook-led effort to build global digital currency Libra. File picture: IANS
Global payment service provider Checkout.com said it would join Libra Association, the entity managing the Facebook-led effort to build global digital currency Libra. File picture: IANS

Facebook: Payments processor Checkout.com to join digital currency project

By Brenna Hughes Neghaiwi and Abhishek Manikandan Time of article published Apr 28, 2020

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Global payment service provider Checkout.com said on Tuesday it would join Libra Association, the entity managing the Facebook-led effort to build global digital currency Libra.

"The Libra project holds the promise of increasing financial inclusion for billions of unbanked people", the company said, adding that it was important to regulate the blockchain space to ensure a secure and stable payments infrastructure.

In February, Canadian e-commerce company Shopify Inc said it would join Facebook's Libra Association even as other firms such as Vodafone Group PLC, Paypal Holdings Inc and Mastercard Inc opted to exit the project, which ran into global regulatory troubles.

Facebook, which unveiled plans for Libra in June, said the cryptocurrency would be backed by a reserve of real-world assets, including bank deposits and short-term government securities, and held by a network of custodians.

Libra will be linked to individual national currencies and overseen by global watchdogs in a scaled-back revamp it hopes will win regulatory approval.

The prospect of Facebook's 2.5 billion users adopting Libra has led to intense scrutiny from global regulators, with many worried its launch could erode national control over money.

Libra's governing body, which is seeking the go-ahead from Switzerland's markets watchdog, said on Thursday that it will now offer "stablecoins" backed by single currencies, as well as a redesigned token based on these currency-pegged coins.

The original plan was for Libra, which was unveiled last June, to be backed by a wide mixture of currencies and government debt. But central banks and regulators feared it could destabilise monetary policy, facilitate money laundering and erode users' privacy, with some threatening to block it.

In response, the Libra Association, which will issue the coin and govern its network, said a "college" of central banks, regulators and enforcement agencies from more than 20 countries set up by Swiss watchdog FINMA will have a say in its bid to be licensed as a payments service provider in Switzerland.

The Geneva-based Libra Association declined to give details of the body's membership and it was not immediately clear how major regulators would respond to Libra's updated plans.

Bitcoin, the biggest digital currency, is little-used in payments or commerce, in part because of its extreme volatility, and remains largely unregulated.

Libra's most prominent original backers, including payments giants Mastercard,, Visa and PayPal, ditched the project in the wake of the scrutiny.

Reuters

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