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Facebook has officially announced its new digital valet “Calibra” that will use Libra. Libra, the new cryptocurrency was officially announced by Facebook on June 18, 2019.
After getting into cryptocurrency world, Libra is supported with top companies such as PayPal, Visa, MasterCard and Uber.
According to Facebook, that Libra is also backed with real world currency. Facebook explains by writing a letter to German politician Fabio De Masi explaining that US dollar has 50%, euro 18%, Japanese yen 14%, British pound 11% and Singapore dollar 7% of the backing for Libra.
50% is quite big reason to worry for other cryptocurrency like bitcoin.
US dollar is one of the strongest currency of the world and most of the trade was made with US dollar.
This may be another alarming situation for financially stable countries like France and Germany that Facebook might start working on its own financial system. Facebook got under lot of heat by both France and German finance ministers but the company explains that Libra is just a digital coin whose supreme aim is to allow the money trade around the globe easily.
Facebook’s strategy of being backed by real-world currencies could actually help Libra stay away from volatility like Bitcoin and other cryptocurrencies.
