Facebook has reportedly disclosed the percentage breakdown of a basket of international currencies that will support its own Libra.
It’s already clear that 50% of the basket will be on the U.S dollar, and the German newspaper Der Spiegel reported on Friday that the remaining portion will comprise of the euro, the yen, the British pound, and the Singapore dollar, with 18 percent, 14 percent, 11 percent, and seven percent, respectively.
However, the basket will not include China’s yuan, the legal tender of the global second-largest economy. A Reuters report suggested the Chinese yuan could help with Libra’s plans in the United States given the concerns over the tense trade relationship between the two nations.
The German newspaper said the social media giant disclosed the percentage breakdown in a letter to Fabio De Masi, a German legislator and former member of the European Parliament.
It describes De Masi as a “left-wing” politician who believes Libra is a threat to democracy, freedom and financial stability. In particular, he was concerned that Facebook’s planned stablecoin will not be underpinned by deposit insurance and that corporate sponsors of Libra may use the information gained from its use, according to Der Spiegel.
Libra is designed to anchor to a host of currencies to facilitate international payments. The stablecoin is governed by an association led by Facebook with members including Visa, PayPal, and Uber. It has been the center of controversy since Facebook announced the plan in June.
Legislators and regulators in the United States have raised concerns over the project, while the France’s finance minister even said the county is determined to block Libra.
Most recently, one board member of the European Central Bank also warned about the threat posed by Libra. Regulators are worried about the potential loss of economic sovereignty and control over monetary policy.
China views the stablecoin as a direct threat and is creating its own central bank digital currency (CBDC) to meet the threat posed by Libra. However, the model proposed by the People’s Bank of China suggests more a glorified payments system unlike a true cryptocurrency.
Some members of the Libra consortium may exit the group due to the controversy, but most of them insist that they are in.