Earlier this year, Facebook finally confirmed rumors that they would be entering the cryptocurrency industry as they released the white paper for the libra token which is due to hit the market in 2020. Since then, Facebook has not released any more details about the token and all that is known is that Facebook has put together a lobbying team to settle any regulatory challenges before the official launch of the token next year.
However, it was reported on September 9, 2019, that Facebook has released some details about the token though not to the general public. Apparently, they spoke to some US senators about their highly-anticipated token and revealed a bit about how it will be backed up.
Fiat and Libra
According to the reports, the libra token will be backed up by several major currencies which include the US. dollar, euro, Japanese yen, British pound and Singapore dollar. Noticeably absent from this list is the Chinese yuan and this might be due to the fact that China is developing its own digital currency even after banning them across the nation.
The reason Facebook produced these details about the token is due to an inquiry by a US senator who has also stated that China is trying to get all countries to include the yuan as part of their foreign currency reserves. Facebook has responded to this by stating that the final decision as to which fiat currencies will be used for the backing of libra is left to the libra consortium, which is made up of several companies that support libra.
“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,” Facebook said.
It should be noted that some believe that the Chinese digital currency that is in development was created in response to libra which is poised to become a worldwide token once it is launched as it will be tied to Facebook’s many platforms. Should these rumors be true, we could be looking at two major tokens competing for dominance across the globe while backed by one of the biggest firms in the world and one of the biggest nations in the world respectively.