Facebook has revealed the breakdown of global currencies that will back the Libra cryptocurrency and China’s yuan will not be among them.
Libra will be largely underpinned by the dollar, with each digital token receiving 50% backing from cash and short-term Treasury bonds from the world’s largest economy.
Yuan Not Included
China, the world’s second largest economy, however, is not represented in the basket. This suggests the Libra Association is concerned that if the yuan were included U.S. lawmakers – who are already largely Libra-sceptic – would look even more unfavorably on the project, given the current trade dispute between China and the U.S.
The rest of the Libra basket will be constructed of cash and short-term bonds of the following denominations: euro 18%, Japanese yen 14%, British pound 11%, and the Singapore dollar 7%.
News of the Libra basket breakdown was first reported in German newspaper Der Spiegel, which said Facebook’s announcement was in response to a request from Fabio De Masi, the finance spokesman of the Left Party faction in the Bundestag, the German parliament.
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