Facebook has let the world know what assets would back its upcoming, globally-spanning stablecoin cryptocurrency, Libra.
Before getting into it, it’s important to note that Libra will be backed 50% by the United States dollar. However, we didn’t know what the other half would be. We now know that it will be 18% backed by the euro, 14% backed by the yen, 11% by the British pound, and seven percent by the Singapore dollar.
Interestingly, Libra won’t be backed by the Chinese yuan. This could be due, in part, to China building its own stablecoin that could effectively compete directly with Libra. And that’s not to mention that China’s asset is already ready for cryptocurrency trading, the country has said before.
As you may know, the Libra Association is a consortium of groups like PayPal, MasterCard, and others that are helping to both build and back the asset. However, it should be noted that Facebook doesn’t necessarily see Libra as being a cryptocurrency that trades as Bitcoin does. Instead, the asset is more ideal for speeding up cross-border transactions.
That said, the idea has the potential to disrupt the global economy as we know it. Because of this, regulators across the world are hesitant to allow the asset without severe examination to ensure that the power isn’t usurped by Facebook. However, we’ll have to wait and see how the launch goes next year, if they’re able to pull off such a vast undertaking, that is.