Facebook announces reserve currencies backing Libra

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According to Bloomberg, Facebook Inc. told U.S. senators that the initial basket of currencies that will back its Libra cryptocurrency will likely include the U.S. dollar, euro, yen, British pound and Singapore dollar.

The information follows a request from U.S. Senator Mark Warner who voiced some concern that China may push the Libra Association to include the yuan in the so-called stable coin.

The company said that it would be the Libra Association that would make the final decision about the list of currencies rather than Facebook. “Any decision whether to add a new currency to the Libra Reserve would be made based on all the facts and circumstances at the time, including any direct or indirect regulatory restrictions,” Facebook wrote.

As we know Facebook and the Libra Association has been grilled by US lawmakers this summer about the plans to launch a digital currency, raising concerns that some of the company’s problems with privacy and data security made it ill suited for the project.

Unlike Bitcoin and other digital currencies, Libra would be backed by a reserve fund composed of government-issued currencies and debt instruments.

In a written response to Warner, Facebook also left open the possibility that the Libra Association might launch the digital currency outside the U.S. even if regulators inside the U.S. still have concerns. “We understand that the Libra Association will not offer the Libra digital currency in any jurisdiction until it has fully addressed regulatory concerns and received appropriate approvals in that jurisdiction,” the company wrote, adding that Facebook would comply with U.S. regulatory requirements

Cointelegraph commented, “While the above statement leaves open the possibility of Facebook launching Libra in other countries, regardless of American regulatory concerns, it would appear unlikely to catch on in China.”

Furthermore Cointelegraph also pointed out that stablecoin firm Tether, the firm behind the USDT dollar-backed stablecoin, today announced that it is releasing a stablecoin backed by offshore yuan.

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