Facebook has revealed the exact composition of reserves for Libra, its cryptocurrency, in response to a German politician’s query. Libra will be backed by a basket of currencies and government bonds to ensure low volatility in its price, thereby making it possible to use the coin for daily transactions.
German publication Der Spiegel reports that Facebook revealed composition of the cryptocurrency in response to a request from Fabio De Masi, a finance spokesperson from the Left Party.
Fifty percent of Libra’s reserves will consist of the U.S. dollar and government bonds denominated in the currency. Out of the remaining, the euro will comprise eighteen percent of the remaining bonds and cash and bonds denominated in the Japanese Yen (14%), British Pound (11%), and Singapore dollar (7 %) form the rest.
The Chinese Yuan, which was inducted into the IMF’s Special Drawing Rights (SDR) reserves last year, is a notable absentee from this list. China’s trade relationship with the U.S., Facebook’s headquarters, is on rocky ground after President Trump imposed tariffs on the country. Facebook’s exclusion of the yuan is widely understood as a move to toe the U.S. government’s line. China has already announced plans to launch its own cryptocurrency soon.
Facebook Acquires Chatbot Startup for Calibra
Meanwhile, Facebook is pressing ahead with its plans to launch Libra. Two new developments are indicative of the company’s forward march in the project.
First, a Techcrunch report last week stated that the Menlo Park company has acquired Servicefriend, a chatbot startup based in Israel, for Calibra. While Facebook did not specify the intent behind its acquisition to Techcrunch, the publication found that the startup’s founders had updated their LinkedIn bios to show they now worked within the Calibra wallet division for Facebook. The report states that Servicefriend has previously worked with the company’s Messenger team to build bots. Libra chief David Marcus was head of the Messenger division before embarking on his current role.
Second, the Der Spiegel report states that Facebook plans to base its Calibra operations for Europe in Ireland, a country that is a favorite with tech behemoths due to its relatively liberal corporate taxes. Facebook already has offices there and revealed plans to bring its total headcount in the country to 5,000 by the end of this year.