But you're right that the token is backed by something, mainly one to one reserves of currencies and government bonds. So you're okay with bitcoin, that has a market cap of over $100bn that's backed by nothing, but someone creates a cryptocurrency that's backed by one to one reserves of the safest investments in the world and that's somehow extremely questionable.

This is factually wrong. Facebook controls a very small portion of Libra (<1/10): https://libra.org/en-US/partners/