Libra by Facebook will be backed up by the US Dollar and not Chinese Yen

The Libra cryptocurrency by Facebook will have a real-money backup, as promised by the company. The question was raised that which money will dominate, which has become apparent now.

According to a letter from Facebook sent to Fabio De, a German politician, 50 percent of the backing of Libra will be through the US dollar. Euro will provide 18 percent support, whereas Japanese yen 14 percent, British pound 11 percent and Singapore dollar 7 percent.

No other currency will be part of backing as it will consist of only the famous ones. After seeing the strength of the dollar and the home base of Facebook, this division is not surprising. Libra’s backing not having some of the currencies could be for its good.

American politicians have an insecurity that Chinese influence might take over. Thus, the exclusion of Chinese yen can please them. Many of the US officials think that China has made its yuan more readily available to expand its exports. The mixing of Libra would make it more irrelevant.

It is expected that Libra would avoid volatility which ruined Bitcoin and other cryptocurrencies. Countries like France and Germany fear that their financial systems might be taken over by the Libra.

Libra must be made available in all growing economies, especially in the countries that are supporting it.

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