The reason this is noteworthy is because this would turn Libra either into a conventional PayPal type operator — which as a money transmitter is obliged to back all PayPal dollar liabilities it issues (or any other currencies it operates in) with one-for-one dollar deposits — or a glorified money-market fund (MMF), a.k.a. The difference between how a money transmitter and a MMF manages their collateral largely comes down to whether deposits are held in licensed bank accounts (the former) or backed by assets bought and managed by the issuer institution (the latter). Read More...
The reason this is noteworthy is because this would turn Libra either into a conventional PayPal type operator — which as a money transmitter is obliged to back all PayPal dollar liabilities it issues (or any other currencies it operates in) with one-for-one dollar deposits — or a glorified money-market fund (MMF), a.k.a. The difference between how a money transmitter and a MMF manages their collateral largely comes down to whether deposits are held in licensed bank accounts (the former) or backed by assets bought and managed by the issuer institution (the latter).
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