Facebook, Inc. (NASDAQ:FB) joined with other 27 members to create Libra Crypto and revealed the breakdown of global currencies. According to Facebook, the US dollar accounts for 50% of Libra crypto and other global currencies like Euro, Yen, GBP, and S$ will account for 18%, 14%, 11%, and 7% respectively. Facebook has excluded Chinese Yuan from Libra Crypto. Exclusion of Chinese Yuan is wise amid growing trade tensions between the US and China.
Reveals percentage breakdown to Fabio
According to Der Spiegel, the German newspaper, Facebook shared the currency breakdown that underpins the Libra Crypto to German Legislator, Fabio De Masi. The German legislator considers Libra as a threat to financial stability, freedom, and democracy. He feels that deposit insurance will not support Libra.
Libra supports global payments
Facebook led by a consortium of 27 members such as Uber, PayPal, Spotify, and Visa created the stable coin Libra to support global payments. After announcing the plan in June, Libra is facing a lot of controversies.
The US regulators and lawmakers are skeptical about Facebook initiative to launch crypto. Bruno Le Maire, the French Finance Minister, scouts for an outright ban of Libra in France. The European Central Bank board member is also against Libra because it may pose a threat. Several members feel that they may lose monetary policy control and economic sovereignty. China develops CBDC, its own central bank digital currency because it sees Libra as a threat.
According to Facebook, the world needs a digitally native and global currency that holds the world’s best currencies attributes like acceptance worldwide, low inflation, stability, and fungibility. The company plans to use blockchain technology to build a new currency and payment system.
Libra Association, a nonprofit organization, based in Switzerland, will manage the standards for Libra. The new currency will also have a central bank called Libra Reserve. Participating companies will become members of the central bank – Libra Reserve.
Facebook forms a subsidiary called Calibra to serve the businesses and individuals with financial services.
The existing cryptocurrencies – Ripple and Bitcoin (BTC) have no intrinsic value. They depend on users acceptance and unstable. On the other hand, Libra is different, and it gets support from the reserves.