4 ms·

I now have read that the Libra will have complete liquidity, will be pegged to multiple currencies and will earn interest (which goes to founding organizations)

I now have read that the Libra will have complete liquidity, will be pegged to multiple currencies and will earn interest (which goes to founding organizations). How can all these things be true? Are they just using these terms with the same freedom they use the word "crypto-currency"?.

thoughtfunction 7y ago
It's a multi-currency index fund consisting of deposits of currency from users. I think the goal is to make an international currency that would be stable across countries.
- mullingitover 7y ago
  If it's pegged to multiple currencies, wouldn't that mean it's not stable against any currency?
  - gremlinsinc 7y ago
    The goal I believe is to be 1:1 in multiple currencies (or maybe 0.9:1 or 1.1:1 as close as possible -- so if you were to buy libra with japanese yen it would cost 1:1, or possibly they'd do it based on the highest of the pegged currencies, so if euro is highest they'd go w/ 1:1 euro, then when you cash out to usd directly from libra, you'd go off the current euro:usd differential. It's definitely complicated, and I think going to be a management / development nightmare. The best thing would've been just go with USD, or Euro since those are the most used funds currently then have a built in forex exchange to instantly change local currencies to libra based on their usd/euro pairing rate.
deleted 7y ago
[deleted]
anonymous5133 7y ago
Yes it is true. From what I understand if there is an excessive amount of selling then they simply fund the withdraws by taking funds out of the reserves and simply "deleting" the libra tokens. Same story if there is lots of people buying. They simply put more into reserves to create new tokens. In theory they could actually put surplus reserves (over 100%) into the backing due to interest accumulation.

4 ms·

I now have read that the Libra will have complete liquidity, will be pegged to multiple currencies and will earn interest (which goes to founding organizations)

by TomMckenny 7y ago

thoughtfunction 7y ago
It's a multi-currency index fund consisting of deposits of currency from users. I think the goal is to make an international currency that would be stable across countries.
- mullingitover 7y ago
  If it's pegged to multiple currencies, wouldn't that mean it's not stable against any currency?
  - gremlinsinc 7y ago
    The goal I believe is to be 1:1 in multiple currencies (or maybe 0.9:1 or 1.1:1 as close as possible -- so if you were to buy libra with japanese yen it would cost 1:1, or possibly they'd do it based on the highest of the pegged currencies, so if euro is highest they'd go w/ 1:1 euro, then when you cash out to usd directly from libra, you'd go off the current euro:usd differential. It's definitely complicated, and I think going to be a management / development nightmare. The best thing would've been just go with USD, or Euro since those are the most used funds currently then have a built in forex exchange to instantly change local currencies to libra based on their usd/euro pairing rate.
deleted 7y ago
[deleted]
anonymous5133 7y ago
Yes it is true. From what I understand if there is an excessive amount of selling then they simply fund the withdraws by taking funds out of the reserves and simply "deleting" the libra tokens. Same story if there is lots of people buying. They simply put more into reserves to create new tokens. In theory they could actually put surplus reserves (over 100%) into the backing due to interest accumulation.