Facebook’s Libra white paper that was published earlier this year has been silently updated.
Facebook’s Libra white paper updated
First noticed by Chris Bummer, a professor at Georgetown University, the update includes amendments considering the change in Libra Association members. The biggest change in Libra white paper was the removal of dividends that were payable to the early investors.
While the old statement from Libra white paper read that the “interest on reserved assets” would cover the cost of maintaining the system and nurturing it while ensuring a low fee rate. The interest would also be used to pay dividends to the members of the Association. Now the white paper has no mention of these dividends instead adds adoption as a task maintained by the interest rates.
Paying dividends to members of the Libra Association received poor feedback from the end-users and would be a hindrance to their operations in the long run for Facebook’s Libra. According to Bummer, this was the main reason behind the company taking back its decision to pay dividends.
If the company wants the project to be attractive to the public, the reserve assets should stable. However, if the interest is used to pay dividends to the association members, it would encourage indulging high-risk assets in the reserve baskets. To ensure that the project is well-received by the masses, the firm has decided to remove the dividends.
Another reason might be that Libra is trying to change its regulatory outlook to avoid being labeled as a security. Some US regulators have already expressed their opinions regarding the matter as they believe Libra is a security and should be regulated as one. However, considering stablecoins’ value remains relatively constant, Bummer believes that this should not be possible.