Singdollar set to be among currencies in Libra basket: Facebook

Unlike bitcoin and other digital currencies, Libra would be backed by a reserve fund composed of government-issued currencies and debt instruments.
Unlike bitcoin and other digital currencies, Libra would be backed by a reserve fund composed of government-issued currencies and debt instruments.PHOTO: THE NEW PAPER

WASHINGTON • Facebook has told United States senators that the initial basket of currencies that will back its Libra cryptocurrency will likely include the US dollar, euro, yen, British pound and Singapore dollar.

The list responds to concerns from Virginia Democratic Senator Mark Warner that China may push the Libra Association to include the yuan in the so-called stable coin, which Facebook and more than two dozen partners are currently developing.

China has encouraged governments to include its currency in their reserve holdings, said Mr Warner, who asked Facebook to commit to excluding it from the Libra basket. The senator and others have expressed concerns that China is attempting to add stability to its currency, which many believe its government manipulates.

The Libra Association would ultimately make such a determination, rather than Facebook alone, the company said when providing its list of potential currencies. "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," Facebook wrote.

Facebook and the Libra Association have faced intense pushback from lawmakers and regulators over their plans to launch a digital currency.

In July, lawmakers grilled Facebook executive David Marcus on the initiative at hearings before the Senate Banking and House Financial Services committees, raising concerns that some of the company's problems with privacy and data security made it ill-suited for the project.

Unlike bitcoin and other digital currencies, Libra would be backed by a reserve fund composed of government-issued currencies and debt instruments.

In response to written questions from Mr Warner, Facebook also left open the possibility that the Libra Association might launch the digital currency outside the US, even if regulators inside the US still have concerns.

A version of this article appeared in the print edition of The Straits Times on September 11, 2019, with the headline 'Singdollar set to be among currencies in Libra basket: Facebook'. Print Edition | Subscribe