The white paper for Facebook'southward proposed Libra currency has been quietly updated, co-ordinate to a Dec. 10 article written past Georgetown University law professor, Chris Brummer. Aside from expected amendments reflecting the revised Libra Clan members, the biggest change is the removal of dividends payable to those early investors.

Alter in use of interest on reserve avails

While the initial Libra white paper published in June specified that involvement on the reserve assets would be used to cover system costs, keep transaction fees low, support growth, and pay dividends to the early on investors i.e. Libra Association members, mention of dividends has at present been removed, so information technology now reads:

"Interest on the reserve assets will exist used to cover the costs of the system, ensure low transaction fees, and support farther growth and adoption."

Dividend removal alleviates potential conflict of interest

The trouble with awarding dividends, and potentially the reason for the change according to Brummer, is that it created a potential conflict of involvement between Libra Association members, and end-users of the currency.

To encourage uptake of Libra, the reserve assets with which they are backed should be stable. However, if dividends are paid from the interest on these assets, this gives an incentive to load the reserve with college-risk assets.

This in turn would reduce trust in and uptake of Libra, because the supposed stablecoins could lose their value.

Avoiding branding as securities

There is also the possibility that the changes are in some way addressing concerns that Libra may be classified as a security.

As Cointelegraph reported earlier this calendar month, 2 lawmakers in the United States would similar Libra and other managed stablecoins to be defined as securities. However, Brummer believes that this is an unlikely outcome, due to the very nature of stablecoins not increasing in value.