Bank Of Japan Considers Difficultly In Regulating Facebook’s Cryptocurrency Initiative

Japanese regulators join the list of agencies around the world that are analysing about how to deal with Libra, Facebook’s digital asset. It is not easy to create a regulatory framework for a new digital asset that breaks with the traditional concepts of fiat currencies.

  • Japanese authorities are analyzing how to better regulate Libra
  • There is a long list of countries concerned about Facebook’s crypto project

The central bank of Japan seems to be concerned about how to deal with Facebook’s Libra cryptocurrency. The digital asset is expected to be launched in 2020 to help users process transactions and payments. There are different regulatory agencies around the world that are trying to understand how to better regulate this virtual currency.

Regulators Get Worried About Libra

Since Facebook announced its digital asset, many regulatory agencies around the world have given their opinion about it and how to regulate it. According to a recent report released by Nikkei Asian Review, the Bank of Japan (BoJ) is concerned about the financial risks related to Libra and the difficulty of regulating it.

According to a BoJ official, Libra is expected to be moving money into an absolutely virtual world, so it is completely different than other forms of digital payments. Facebook’s digital currency is expected to be linked to the price of several fiat currencies that would back Libra’s value. This is the mechanism that is already used by other stablecoins in the market, including Tether.

The Governor of the Bank of Japan, Haruhiko Kuroda, remains careful about how cryptocurrencies evolve in the economy and whether they are used as a means of payment in the country. If they become used more and more they could eventually affect the financial and payment systems.

If there is an account holder at a regional bank that wants to purchase Libra, the bank would never be able to know whether the virtual coin’s operators would redeposit reserve funds with the institution. This also shows that Libra and other cryptocurrencies are a fundamental challenge to governments’ authority.

The report reads as follows:

“Should Libra's users lose faith and deplete its reserves in a rush to reclaim their cash, a real-world impact would follow. Criticisms have arisen painting Libra as a “selfish” attempt to implement only the convenient parts of cryptocurrencies while leaving real-life authorities to clean up the mess.”

As previously reported by Anthony Pompliano, Members of the Congress sent a letter to Facebook asking them to stop the development of the Libra cryptocurrency.

In this letter, the authorities claim that Libra could eventually rival the U.S. monetary policy and the dollar. Moreover, the representatives that signed this letter say that this raises serious privacy, trading, national security, and monetary policy concerns for users, consumers, investors and the whole economy.

Other countries such as the United Kingdom, France, Singapore, Russia and Italy have already raised their questions regarding Facebook’s digital asset. They are also all analyzing how to better regulate the virtual currency and which are the risks related to it.

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Carl T
Carl T
Carl is a legend in cryptocurrency space for his long-storied experience, history and insights. He is a digital nomad who fell in love with bitcoin and its offspring for many years now and prides himself on delivering quality perspectives in the emerging world of crypto-assets and blockchain technology.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


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