Concerns around launch of Libra as global stablecoin turned out to be unreasonably vast, the Federal Reserve, the US central bank, reported in its latest analysis. Fed analysts based their conclusion on a model operating with more possibilities of Libra progress. For example, they were verifying whether Libra slowly became a generally accepted currency. It turned out that even if Libra began to be generally accepted, it wouldn’t become that dominant to overshadow traditional currencies.
Libra opponents had warned that a possible extension could destabilize current financial system, which is based on so called fiat money, a currency with forced circulation. Libra would be backed by traditional reserve currencies and to some extent would be at an advantage. Nowadays, currencies are not backed by any commodity as they were back in 19th century in times of so called metallic standard. Yet, the Fed admits that Libra could be an attractive asset to some part of demand on financial markets.