Details are emerging on which fiat currencies might back the Libra stablecoin.
Bloomberg reported Monday that Facebook wrote a letter to U.S. Senators about Libra, addressing concerns over potential Chinese influence on the cryptocurrency. Sen. Mark Warner (D-Va.) previously wrote to Facebook asking the company to exclude the Chinese yuan from the basket of assets backing the Libra stablecoin.
“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 reportedly wrote, adding that the decision would be made by the Libra Association, not Facebook itself.
According to Bloomberg, Facebook provided a list of possible currencies to include in the Libra Reserve but appeared to stop short of saying that the yuan would be excluded outright.
The U.S. dollar, euro, Japanese yen, British pound and the Singapore dollar were included in the letter.
David Marcus, Facebook’s blockchain lead, previously told the U.S. House Financial Services Committee that 50 percent of the basket backing Libra would be U.S. dollars, with the other half in stable sovereign currencies and low-risk assets.
Controversial launch
Facebook first unveiled its vision for Libra this summer, announcing it would create two tokens: the fiat-backed stablecoin and a security token that members of Libra’s governing council could use to oversee the network.
The project faced immediate pushback, with regulators in the U.S. and a number of other jurisdictions immediately calling for the company to halt development until lawmakers’ questions could be answered.
Facebook’s Marcus testified before the House Financial Services and Senate Banking committees in July, attempting to reassure lawmakers that the cryptocurrency wouldn’t destabilize the global monetary system.
The company has pledged to continue developing the project, though it did say it would not launch until any regulatory concerns have been resolved.
Facebook image via Shutterstock