Facebook Inc.’s Libra could possibly change course in the future and instead launch multiple so-called stablecoins tied to traditional currencies.

The surprise announcement came from Libra head Davis Marcus, who told a banking seminar over the weekend that the group’s main goal remained to create a more efficient payment system, including looking at alternative approaches.

“We could do it differently,” Reuters quoted Marcus as saying. “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc. “We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form. That is one of the options that should be considered.”

Marcus did note that traditional stablecoins were not the group’s current preferred option but that it was certainly open to the idea.

Stablecoins are cryptocurrencies tied to an asset, usually traditional currency, to stabilize its price. Libra, at least in its originally proposed form, is a type of stablecoin but varies in that it would be backed by a basket of assets, including currency along with gold and other assets.

The advantage of Facebook going down a more traditional stablecoin path, one where it would launch multiple stablecoins tied to respective currency amounts, is that their use is already legal in many jurisdictions. Of existing stablecoins, Bitfinex’s Tether is the most popular and currently the fourth-largest cryptocurrency by market cap as of Oct. 20. However, Tether itself has had some issues, including not maintaining its currency balance to secure its value.

Marcus’ comments follow a tumultuous few weeks for the nascent group. Following speculation that various members were considering pulling their support, PayPal Holdings Inc. became the first company to quit the Libra Association Oct. 6. Mastercard Inc., Visa Inc., eBay Inc., Stripe Inc. and Mercado Pago followed Oct. 11, with Booking Holdings Inc. the latest to leave Oct. 14.

The companies departing Libra gave polite platitudes when leaving, but the general consensus is that they all pulled support because of the regulatory scrutiny Libra has received in both the United States and Europe. In the U.S., Libra has been attacked by members of Congress as well as President Donald Trump. In Europe, it has been targeted by investigations and hearings.

Whether a switch to more traditional stablecoins will overcome some of those concerns is another matter. The Financial Action Task Force, an intergovernmental body that sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats, raised concerns over stablecoins at a meeting held Oct. 16-18.

“Emerging assets such as so-called global ‘stablecoins,’ and their proposed global networks and platforms, could potentially cause a shift in the virtual asset ecosystem and have implications for the money laundering and terrorist financing risks,” the FAFT outcomes statement read. “There are two concerns: mass-market adoption of virtual assets and person-to-person transfers, without the need for a regulated intermediary. Together these changes could have serious consequences for our ability to detect and prevent money laundering and terrorist financing.”

Image: btckeychain/Flickr