The US dollar is set to be the main fiat currency underpinning Facebook’s proposed stablecoin Libra, according to a report from German newspaper Der Spiegel.
Citing a letter from Facebook sent to a German legislator, the publication reported on Friday that the US currency would account for 50% of the basket of fiat currencies backing Libra. The euro is the second-largest component of the basket with 18%, followed by the Japanese yen (14%), the British pound (11%) and the Singapore dollar (7%). Facebook sent the letter in response to a question from German legislator Fabio De Masi.
One notable omission from the basket is that of China’s national currency, the yuan. In a separate Friday report, Reuters noted that excluding the yuan “could help smooth the planned cryptocurrency’s path in the United States, where officials have raised concerns about the yuan’s growing stature as a reserve currency at a time when trade relations between the two economic powers are tense”.
Since its announcement in June, the Libra project has faced significant pushback from regulators and lawmakers across the world. The pushback has been especially strong in the US, with Facebook’s blockchain chief David Marcus attending two congressional hearing in July – before the Senate Banking Committee and the House Financial Services Committee. During the hearings, lawmakers expressed serious concerns with Facebook’s cryptocurrency plans and urged the company to halt development on the project until those concerns had been addressed.
Marcus assured the lawmakers that Facebook was fully committed to working with regulators in the US and around the world and added that the social media giant would not offer Libra “until we have fully addressed regulator’s concerns and received the proper approvals”. Subsequently, Facebook admitted Libra’s launch was not a certainty.
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