Facebook’s cryptocurrency, Libra, is backed by a number of national fiat currencies including the US Dollar, Singapore dollar, Euro and British pound according to a report released by Bloomberg on Sept 10. The social media giant released its initial report to the Senate on the basket of currencies backing the stable coin – which surprisingly did not include the Chinese Yuan.
Facebook Inc. excludes Chinese Yuan From Libra backers
Facebook Inc. released its potential currency backers for its Libra stable coin following the calls by Virginia Democratic Senator Mark Warner for Libra Association not to include the Chinese Yuan in its basket of fiat currency backers. China has been calling on banks around the world to increase their Chinese Yuan reserves amidst the trade wars with US.
Despite the list excluding the Yuan, the final decision on which currencies back the Libra stable coin will be made by the Association, not Facebook alone. A section of the report from Facebook read,
“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.”
The 27 member consortium is looking to offer the stable coin across the world despite the US lawmakers and senators having regulatory issues about the crypto. The report reads,
“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.”
China Plans to Launch its Stable Coin
Reports from the People’s Bank of China confirmed the possibility of launching its own stable coin before Facebook’s Libra. Despite official reports denying that China is launching a cryptocurrency in November, the country is researching on Libra and the launch of a similar token backed by the Yuan.
Chinese investors have a love history with Tether (USDT), a stable coin backed by the US Dollar. The company announced on Aug 21. they will be launching the CHNT token, a stable coin backed by the Chinese Yuan to appease their Chinese investors.