An interesting announcement came through this week on CNBC informing that a new token will be created that may rival Facebook’s Libra ambitions. The UK based firm SAGA has announced it will launch a digital asset called Saga token that will be pegged to a basket of some of the world’s most popular reserve currencies.
Rather than creating a new asset basket like Libra’s, Saga is pegging its token’s value to bank deposits in the same group of currencies that form the International Monetary Fund’s special drawing rights (SDR) — these are international reserve assets held by central banks to supplement their official reserves. The basket is heavily weighted in dollars, as well as the euro, Chinese yuan, Japanese yen and British pound. Another important difference is that Saga does not plan to make any revenue from the token – they will simply issue is and list it on the Liquid exchange, rather than also build a digital wallet where it can be stored and exchanged. Facebook’s Libra plans to generate revenue by operating a storage and exchange wallet called Calibra.
The project also has the backing of some very notable professionals and experts, with the company’s advisory board comprised of the likes of Nobel laureate Myron Scholes and J.P. Morgan’s Jacob Frenkel. It will be very interesting to see if the Saga token overtakes the enthusiasm for so-called stable coins and Facebook’s Libra as a more viable option and alternative to create a digital asset without risking monetary sovereignty of individual countries.