> I understand that by keeping fiat currency reserves, they can guarantee a minimum exchange rate below which the Libra can never fall. The way this works is t

> I understand that by keeping fiat currency reserves, they can guarantee a minimum exchange rate below which the Libra can never fall. The way this works is that it's a guaranteed arbitrage opportunity: if the price of Libra somewhere falls below USD 1, you can buy Libra at that cheaper price, exchange it at Facebook for USD (at the fixed USD 1 price), sell the USD, and pocket the difference. > But how can they stop the Libra from rising? The way this works is the same thing in the opposite direction: if the price of Libra somewhere rises above USD 1, you can buy USD, exchange it at Facebook for Libra (at the fixed USD 1 price), sell the Libra at the higher price, and pocket the difference.