Facebook has reportedly revealed the percentage breakdown of a basket of global currencies that will underpin its Libra cryptocurrency.
While it’s already known that 50 percent of the basket will be on the U.S. dollar, the German newspaper Der Spiegel said in a report on Friday that the remaining portion will consist of the euro, the yen, the British pound and the Singapore dollar, with 18 percent, 14 percent, 11 percent, and seven percent, respectively.
The basket will not include the Chinese yuan, the legal tender of the world’s second-largest economy. A report from Reuters suggested excluding the Chinese yuan could help with Libra’s plan in the U.S. given the concerns over the tense trade relationship between the two countries.
The German newspaper said Facebook revealed the percentage breakdown in a letter to Fabio De Masi, a German legislator and former member of the European Parliament.
The newspaper describes him as a “left-wing” politician who believes Libra is a threat to democracy, freedom and financial stability. He is particularly concerned that Libra will not be backed by deposit insurance and that corporate sponsors of the coin may use information harvested from its use, according to Der Spiegel.
Libra, a stablecoin that is designed to anchor to a basket of currencies to facilitate global payments and is governed by a consortium led by Facebook with members including Visa, Uber, and PayPal, has been at the center of controversy since Facebook announced the plan in June.
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Lawmakers and regulators in the U.S. have raised concerns over the initiative, while the French finance minister even said the nation plans to block Libra. A board member at the European Central Bank also warned the threat posed by Libra in a recent report. Risks have been cited in addition to concerns about the possible loss of economic sovereignty and control over monetary policy.
China views the currency as a direct threat and is developing its own central bank digital currency (CBDC) to meet the challenge posed by Libra, although the structure proposed by the People’s Bank of China (PBoC) suggests more a glorified payments system than a true cryptocurrency.
Some members of the Libra Association, as the consortium is known, may exit the group because of the controversy, but most insist that they will stay in.
David Marcus image via House Financial Services Committee
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