Facebook to Back Libra with Major Fiats, Might Exclude Chinese Yuan

The final decision will be taken by Facebook and its 27 Libra Association partners.

Facebook and it’s Libra Association partners are planning to initially back Libra with fiats including the US dollar, euro, yen, British pound, and the Singapore dollar, Bloomberg reported on Tuesday.

The social media giant revealed this in response to concerns raised by Senator Mark Warner (D-Virginia) over China’s attempts to push the Libra Association to include the Chinese yuan in the basket of the currencies backing Libra.

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Citing China’s push for various governments to include its fiat in their reserves, Senator Warner wanted Facebook to commit that the company would not back its Libra with the yuan.

The California-headquartered company, however, made it clear that it is not capable of making such decisions as the Libra Association will be solely responsible for anything related to the upcoming digital currency.

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“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,” the social media company noted.

Setbacks and influences

Since Facebook’s announcement to introduce Libra, the company has been facing setbacks from regulators and lawmakers around the world. After two hearings in the United States in front of lawmakers, the company is now facing an antitrust investigation by the European Commission for its unfair advantage with Libra in the payments industry.

It also is trying to fight back against resistance from US lawmakers and is on a hiring spree for lobbyists to influence blockchain policymaking in Washington.

Facebook set up the Libra Association in Switzerland and made it clear that the digital currency will be regulated under Swiss laws. Unlike their global counterparts, the Swiss regulators are not hostile towards 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,” the company added.

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