Bloomberg reported Monday that Facebook wrote a letter to U.S. Senators about Libra, addressing concerns over potential Chinese influence on the cryptocurrency. Sen. Mark Warner (D-Va.) previously wrote to Facebook asking the company to exclude the Chinese yuan from the basket of assets backing the Libra stablecoin.
Details are emerging on which fiat currencies might back the Libra stablecoin.
“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 reportedly wrote, adding that the decision would be made by the Libra Association, not Facebook itself.
According to Bloomberg, Facebook provided a list of possible currencies to include in the Libra Reserve but appeared to stop short of saying that the yuan would be excluded outright.
The U.S. dollar, euro, Japanese yen, British pound and the Singapore dollar were included in the letter.
David Marcus, Facebook’s blockchain lead, previously told the U.S. House Financial Services Committee that 50 percent of the basket backing Libra would be U.S. dollars, with the other half in stable sovereign currencies and low-risk assets.
Facebook first unveiled its vision for Libra this summer, announcing it would create two tokens: the fiat-backed stablecoin and a security token that members of Libra’s governing council could use to oversee the network.
The project faced immediate pushback, with regulators in the U.S. and a number of other jurisdictions immediately calling for the company to halt development until lawmakers’ questions could be answered.
Facebook’s Marcus testified before the House Financial Services and Senate Banking committees in July, attempting to reassure lawmakers that the cryptocurrency wouldn’t destabilize the global monetary system.
The company has pledged to continue developing the project, though it did say it would not launch until any regulatory concerns have been resolved.
France ‘Cannot Authorize’ Facebook’s Libra Development in Europe
France plans to block the development of Libra – Facebook’s proposed stablecoin payments network – in Europe.
French Finance Minister Bruno Le Maire said that the country cannot permit the launch of Facebook’s proposed cryptocurrency in Europe because the “monetary sovereignty of states is at stake,” CNBC reported Sept. 12.
The report notes Le Maire’s apparently resolute stance – delivered at the opening of the OECD Global Blockchain Policy Forum 2019 in Paris – as follows:
“All these concerns around Libra are serious. So I want to say this with a lot of clarity: I want to be absolutely clear: in these conditions, we cannot authorize the development of Libra on European soil.”
Facebook’s stablecoin an “attribute of the sovereignty of the States”
This June, Le Maire had said that he would ask for guarantees from Facebook that Libra would not be exploitable for illicit activities such as terrorism financing.
He also argued that the tech giant’s stablecoin was an “attribute of the sovereignty of the States” and should thus “remain in the hands of the States and not of the private companies which answer to private interests”.
In parallel, U.S. lawmakers have expressed their persistent “concerns […] with allowing a large tech company to create a privately controlled, alternative global currency.”