Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Among the list of fiat currencies released by Facebook, the company has so far exempted the Chinese Yuan as a fiat backing its Libra token.
When Facebook unveiled its Libra whitepaper back in June 2019, it already announced that it will be backed by a number of global fiat currencies. However, this time, the social media giant has shared additional details about the Libra’s fiat-pegged options.
As per the Bloomberg report, Facebook told the U.S. senators that each Libra token will be supposedly tied to fiat currencies like Euro, Yen, British Pound, U.S. Dollar, and Singapore Dollar. However, the Chinese Yuan is exempted from the list and this comes as no surprise knowing that China’s central bank is itself launching its state-backed digital currency to counter the upcoming competition from Libra.
The list of fiat currencies came out after Virginia’s Democratic Senator Mark Warner stated that China might push Facebook to include Yuan in the list of its fiat currencies for Libra. The senator said that China is luring governments across the globe to include the Yuan in their foreign reserve holdings.
In addition to announcing the list, Facebook said that the decision to add a fiat currency entirely depends on the Libra Association consisting of 20+ member companies. It added that any development with respect to Libra shall be overseen by the Association and not any individual company.
“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. 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,” said the company.
Over the last few months, Facebook has bee having pretty rough time convincing the regulators about the company’s potential to handle such a massive project. Besides, the regulators have repeatedly cast doubts on Facebook’s ability to deal with users’ privacy concerns. Facebook has been facing reputational challenges after last year’s Cambridge Analytica scandal.
With the ongoing concerns of the U.S. regulators, there is every possibility that Facebook might launch Libra in overseas jurisdictions that give necessary approvals to the social media giant.
On the other hand, China is accelerating its development of a central bank digital currency (CBDC). As per internal sources, the People’s Bank of China (PBoC) could launch the digital Yuan as soon as November 2019.
A number of big organizations are leaning towards cryptocurrencies as they offer much faster payment settlements at low cost, anywhere across the globe. An executive of tech giant Apple recently stated that the company is closely watching all the developments in the crypto space.