U.S. dollar to be main currency underpinning Facebook's Libra: Spiegel

BERLIN (Reuters) - The U.S. dollar will make up 50% of the basket of currencies backing Facebook's planned digital coin Libra, with the euro, yen, sterling and Singapore dollar comprising the rest, Der Spiegel reported, referring to a letter from Facebook. China's yuan currency will not be included, which could help smooth the planned cryptocurrency's path in the United States, where officials have raised concerns about the yuan's growing stature as a reserve currency at a time when trade relations between the two economic powers are tense.

Reuters September 21, 2019 00:08:11 IST
U.S. dollar to be main currency underpinning Facebook's Libra: Spiegel

US dollar to be main currency underpinning Facebooks Libra Spiegel

BERLIN (Reuters) - The U.S. dollar will make up 50% of the basket of currencies backing Facebook's planned digital coin Libra, with the euro, yen, sterling and Singapore dollar comprising the rest, Der Spiegel reported, referring to a letter from Facebook.

China's yuan currency will not be included, which could help smooth the planned cryptocurrency's path in the United States, where officials have raised concerns about the yuan's growing stature as a reserve currency at a time when trade relations between the two economic powers are tense.

In a letter responding to a question from German legislator Fabio De Masi, Facebook said the dollar would make up 50% of the basket, followed by the euro with 18%, the yen with 14%, the British pound with 11% and the Singapore dollar with 7%, according to German news magazine Der Spiegel.

Calls by Reuters to De Masi, the legislator who received the letter, were not immediately returned.

The Swiss-based Libra Association, the non-profit organisation comprising Facebook and 27 other members that plans to launch and oversee the currency, declined to comment on the specific breakdown of the "Libra Reserve".

But it said the reserve was expected to be a pool of cash and very short-term government securities denominated in U.S. dollars, euros, yen, sterling and Singapore dollars.

Facebook's planned Libra is the most well-known of the stablecoins, cryptocurrencies backed by assets such as traditional money deposits, short-term government securities or gold. They have the potential to be less volatile and more of a mainstream asset than existing cryptocurrencies like bitcoin.

Regulators around the world have reacted with extreme wariness to the proposal, with central bankers warning they could have a destabilising effect on the global financial system.

(Reporting by Thomas Escritt; Additional reporting by Brenna Hughes Neghaiwi in Zurich; Editing by Pravin Char)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Amazon union vote enters final stretch in watershed moment for U.S. labour
Business

Amazon union vote enters final stretch in watershed moment for U.S. labour

By Mike Spector and Jeffrey Dastin (Reuters) - The National Labor Relations Board has begun reviewing ballots from Amazon.com Inc's workers in Alabama, who have voted on whether to form a union, with momentum for future labour organizing at America's second-largest private employer hanging in the balance. Agents from the labour board began sifting through ballots sent to more than 5,800 workers at Amazon's Bessemer, Alabama-based warehouse at 10 a.m

Spotify buys Locker Room app's maker Betty Labs in live audio push
News & Analysis

Spotify buys Locker Room app's maker Betty Labs in live audio push

By Elizabeth Culliford NEW YORK (Reuters) - Spotify Inc said on Tuesday it has purchased Betty Labs, the company behind sports-focused social audio app Locker Room, to accelerate its move into live audio. New voice-based platforms, including invite-only social app Clubhouse, have seen rapid growth in recent months during the COVID-19 pandemic.

Oil falls as Suez Canal opens, dollar rallies; eyes on OPEC+ meeting
Business

Oil falls as Suez Canal opens, dollar rallies; eyes on OPEC+ meeting

By Devika Krishna Kumar NEW YORK (Reuters) - Oil prices slid on Tuesday as the Suez Canal reopened to traffic and the dollar rallied, while focus turned to an OPEC+ meeting this week, where analysts expect an extension to supply curbs to offset dim demand prospects. Brent crude fell $1.20, or 1.9%, at $63.78 a barrel by 1:12 p.m.