Facebook’s planned digital coin Libra will get half of its backing from the U.S. dollar, with other support from the euro, yen, sterling and Singapore dollar, Reuters reported on Friday (Sept. 20).
The information was reported by the German news magazine Der Spiegel, referring to a letter from Facebook to German politician Fabio De Masi, Reuters said.
The letter indicated that 50 percent of Libra’s backing would come from the U.S. dollar. The euro would represent 18 percent; the Japanese yen, 14 percent; British pound, 11 percent; and Singapore dollar, 7 percent, the article said. China’s yuan currency would not be included.
The non-profit Swiss-based Libra Association declined to comment to Reuters regarding the “Libra Reserve,” but did say the reserve would likely be “a pool of cash and very short-term government securities denominated in U.S. dollars, euros, yen, sterling and Singapore dollars.”
David Marcus, the Facebook executive in charge of proposed cryptocurrency Libra, said the project was moving forward and would be released in 2020 despite the global regulatory skepticism.
Regulators and lawmakers around the world have expressed opposition to Facebook’s plan, especially France and Germany, who have said they would block the use of Libra if it was ever released.
“The goal is still to launch Libra next year,” Marcus said on Friday (Sept. 20). “Until then, we’ll need to address all questions adequately and create a suitable regulatory environment.”
Marcus said Libra probably wouldn’t become a way to pay for things in places like France, Germany or Switzerland, but that it could be used for cross-border payments or small transactions. But he did say that Calibra, the digital wallet that holds Libra, will be available everywhere as regulations permit.
Some regulators are worried, however, that Libra could destabilize the financial system or that it could be used for unscrupulous purposes like to commit a crime or launder money.