Singapore is reportedly amongst an initial bundle of global currencies Facebook is looking to include in a reserve fund backing its cryptocurrency, Libra. It also states it will not offer the digital currency in any jurisdiction until local regulatory concerns have been been addressed.
The social media giant told US government officials the Singapore dollar, Japanese yen, British pound, euro, and US dollar likely would be the first bunch of currencies to back Libra, according to a Bloomberg report Tuesday.
The revelation emerged in its response to US senator Mark Warner's concerns that China might campaign to have the yuan included in the reserve fund backing the cryptocurrency. Warner noted that Beijing had urged governments to include the Chinese currency in their reserve holdings and asked that Facebook left it out of the Libra basket.
The US government has repeatedly maintained that China manipulates its currency.
Facebook noted that the Libra Association, comprising several Libra partners such as Visa, Coinbase, and PayPal, had the final say on decisions related to the cryptocurrency, including its reserve, and these would be made "based on all the facts and circumstances at the time".
On its website, the association said that Libra, unlike most cryptocurrencies, would be fully backed by a reserve of real assets. "A basket of currencies and assets will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value," it added.
In its response to Warner, Facebook also noted that Libra would be launched outside the US market if US regulators still had concerns about the digital currency. "We understand that the Libra Association will not offer the Libra digital currency in any jurisdiction until it has fully addressed regulatory concerns and received appropriate approvals in that jurisdiction," it said.
The Singapore government in July said it was "open" to new innovations in the fintech sector if these did not pose any threat to the stability of the local ecosystem. It said it wanted Facebook to provide more details on Libra before deciding on whether there was need for new regulation.
Senior Minister Tharman Shanmugaratnam, who oversees the country's central bank Monetary Authority of Singapore, said: "It is in the early stages of development, with a number of issues to be worked out around its features, use cases, and governance arrangements. Like other regulators around the world, MAS will make an informed assessment of the potential benefits and risks of Libra once these details become clear."
Facebook previously said Libra, slated for launch next year, would be integrated with the company's apps and services including a new digital wallet that would be integrated with Facebook's Messenger and WhatsApp. It also would be made available as a standalone Google Android and Apple iOS app, potentially for use with third-party providers and e-commerce marketplaces.