New developments in Libra in June: release time revealed

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PART 01 New developments in Libra

On June 10, Dante Disparte, director of policy and communications for the Libra Association, said that the first phase of Libra's rollout will begin in the fourth quarter. But unlike last year's promised plan to be open and entirely reliant on surveillance, the Libra network requires permission to join and the first phase won't work when it hits unbanked banks. According to sources, the first phase of Libra will be closely related to the issuance of licenses for crypto companies in regulatory jurisdictions such as the United States, Europe and Singapore, and will also implement FATF’s recommendations for regulated virtual asset service providers (VASPs), involving transfer rules wait.

Libra knows that financial inclusion can only really begin in Phase 2, when the network will start adding so-called "non-custodial wallets" that don't connect to regulated VASPs or in countries that don't have that option. Libra can’t say exactly when Phase 2 will start, but Mandeep Walia, chief compliance officer at Novi, said allowing non-custodial wallets to create accounts directly on the network “is something that the project feels strongly about from a financial inclusion standpoint. "

We have learned that the Libra Association has hired Credit Suisse executive Sterling Daines as its Chief Compliance Officer (CCO), according to a June 10 statement from the Libra Association. Daines is currently Head of Global Financial Crime Compliance and Managing Director at Credit Suisse. He is said to be leaving Credit Suisse to join the Libra Association later this year. The hiring of Daines is the latest move by the Libra Association, signaling a heightened focus on compliance. They hired HSBC's chief legal officer Stuart Levey as chief executive in mid-May and a former FinCEN director as general counsel later that month.

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PART 02 Statements related to Libra

Regarding Libra, some experts, scholars and relevant departments have also given their own views and suggestions recently.

On June 19, Zhu Min, Dean of the National Institute of Financial Research of Tsinghua University, talked about Libra at the Lujiazui Forum. He said that as a basket of currencies, Libra had a great impact on the world after its birth last year. He also said that although Libra has encountered a series of technical problems, Libra has now been adjusted to abandon the public chain, strengthen cooperation with supervision, and relax the top-down process. "In this sense, Libra currency can be operated and implemented very quickly, which will have a great impact on the international currency market, especially on the marginal currencies of small and medium-sized countries, and will also have an impact on monetary policy and global capital flows. Influence."

Federal Reserve economists Garth Baughman and Jean Flemming said in a new report released on June 22, local time in the United States, that policy makers may be too concerned about the unlikely adverse effects of a basket of stablecoins, which has a negative impact on global stablecoins. concerns are also overblown. Critics have argued that Libra's original plan to maintain the value of its stablecoins through multi-currency reserves could undermine or even replace those fiat currencies. Economists say modeling shows that while a basket of currencies may become a global demand, regular fluctuations in fiat value and trade are such that a basket of currencies can never dominate any one component currency.

And on June 23, Financial Services Commissioner Valdis Dombrovskis said the European Commission will propose new rules later this year to develop "sound" encryption in the EU. Asset markets, including stablecoins against Facebook's digital currency Libra. Cryptoassets benefit consumers and businesses by providing cheaper and faster payments. But regulators are trying to catch up to these fast-growing digital currency markets.

“A lack of legal certainty is often cited as a major obstacle to the development of a robust cryptoasset market in the EU,” Dombrovskis said at the “Digital Financial Outreach” conference. To address this regulatory gap, the European Commission will introduce legislation in early fall to Balancing the need for rules to protect customers without hampering innovation in a developing industry. Under this new regime, the rules would be proportional to the level of risk.

Dombrovskis also warned that less risky projects would face looser rules, while rules would be stronger for global cryptocurrencies like Libra, as they could pose financial stability and monetary policy challenges. Libra is a "stablecoin," a fixed type of cryptocurrency pegged to one or a basket of sovereign currencies such as the euro.

Libra is about to be released. Although there have been major changes from the original Libra white paper plan, and great concessions and compromises have been made in design concepts and principles, Libra still emphasizes its original intention of providing services for users without bank accounts. This point, and said that it will gradually implement the plan in the second phase of Libra issuance to realize its vision of inclusive finance. Libra's doing so can be said to be a curve to save the country, because under strong regulatory pressure, Libra can be successfully issued as soon as possible to have the opportunity to implement and display more ambitions.

Like this kind of digital currency linked to sovereign currency, the Libra project was the first to be proposed. Coupled with the strong influence of Facebook and the Libra Association, the value it can create and the influence it can have are really huge. However, if due to regulatory issues, it is delayed to go online, it may be unknown whether Libra can eat the first slice of the blue ocean market. After all, standing on the shoulders of giants, many things are already getting twice the result with half the effort. Presumably Libra does not want to work hard for a long time to make wedding clothes for others.

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