Facebook’s Libra is backed by multiple national currencies, according to a new report. In its journey to get its very own Stablecoin approved by regulators, Social media giant Facebook reportedly shared details regarding the project’s proposed backing reserves. According to a Sep 9 Bloomberg report, the social media giant revealed to senators about the backing reserves of its proposed Libra Stablecoin.
Libra backed by major national currencies
According to the report shared to the senators, the Libra Stablecoin will be backed by a number of national currencies. The currencies mentioned include the U.S Dollar, the Euro, Japanese Yen, Singapore dollar, and the British pound. According to Bloomberg, the Chinese Yuan maybe excluded from the group of reserve assets.
Facebook reportedly produced the list of its backing assets after an inquiry by Virginia Democratic Senator Mark Warner. The senator stated that China had been encouraging governments to include the Chinese Yuan in their foreign currency reserve holdings.
In its turn, Facebook responded by saying that any final determination regarding the currencies that back its Stablecoin, is the purview of the Libra Association, which is a consortium made up of different companies and interested parties that will oversee the development of the Libra. A statement by the social media giant read;
“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.”
This statement makes it clear that the Libra Stablecoin will not be launched in America unless all the regulatory concerns have been resolved. It does however leave room for potential launches in other jurisdictions where regulatory concerns will be at a minimum. It is unlikely that one these jurisdictions will be China though.
Yuan backed Stablecoin
This is because reports have indicated that China is plotting the launch of its own national digital currency ahead of Libra. Government news sources have suggested that relevant financial institutions in china are developing the digital renminbi which is directly in response to Facebook’s Libra project. Just hours ago, the firm behind the USDT dollar-backed Stablecoin announced that it would be releasing a Yuan-backed Stablecoin. The Yuan-backed coin will differ from its dollar-backed counterpart mainly because it can be traded freely on foreign currency markets and is free from the monetary policies set in Beijing.
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