Facebook has shared the details of the proposed reserve currencies that will back the Libra stablecoin. A report unveiled this news on September 9, noting that Facebook shared this information with the US Senate. Per the report, this move is part of the social firm’s goal of getting regulatory approval for its Libra project.
According to the publication, Libra will be pegged to several national currencies. These include the US dollar, euro, British pound, Japanese yen, and the Singapore dollar. Nonetheless, the social firm may exclude the Chinese yen from this list.
Reportedly, Facebook unveiled this list following an inquiry from Senator Mark Warner. Per Warner, China has been persuading other governments to include its currency in their foreign currency reserve holdings. He went on to ask Facebook to exclude the yuan from the Libra basket.
In response, Facebook said,
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,
China’s Central Bank Digital Currency (CBDC) Project
According to a recent report, China is planning to roll out a national digital currency before the launch of Libra. Official government news sources unveiled that the PBoC is creating the digital renminbi to compete against Libra.
Another publication revealed that the PBoC had completed a model for issuing a national digital currency. Nonetheless, the currency would be fully centralized, meaning it is not a crypto asset as such. However, the coin would allegedly have anonymous transfers as its users will not need to have bank accounts. Per the PBoC, the digitized renminbi would help it improve the efficiency of its monetary system.
The bank also refuted claims that the digitized version of the renminbi would go live this November. It termed these claims as “Inaccurate speculation”.
This news comes after Tether, the creator of USDT released an offshore yuan-backed stablecoin. While the offshore yuan (CNHT) is a Chinese currency, it differs from the onshore yuan. The major difference is that CNHT is freely tradeable on foreign markets. On the other hand, the PBoC controls the onshore yuan.
In its announcement, Tether unveiled that the new stablecoin is dubbed Tether CNHT. It would be available as an ERC-20 token on the Ethereum blockchain.
Do you think excluding the Chinese yuan from the basket of Libra’s reserve currencies can help Facebook win the trust of US regulators? Let us know in the comments below.