Financial officials of Japan are looking into the impact of Facebook’s newly announced cryptocurrency venture, Libra.
According to sources, Japan will begin to investigate the impacts of cryptocurrencies, especially Libra, on the financial market regarding monetary policies and financial regulation, as well as, its effect on the global banking system.
The investigation was said to be conducted in anticipation of the G7 Finance Minister Meeting that will be held in France next week. Japanese financial delegation in the G7 meeting includes a working group currently consists of representatives from the Bank of Japan, the Ministry of Finance, and the Financial Services Agency.
The multiple agency finance committee is expected to focus on cryptocurrencies and Libra concerning regulation, monetary policy, tax, and payment settlements. They first met earlier this week to discuss their plans regarding the growing prominence of blockchain technology and crypt-based money.
France and Japan are especially keen to find out how central banks from around the world can make sure that currencies like Libra are properly regulated. Japan hopes to expand its current working group to involve regulators from other countries to come up with coherent policies.
Libra, Facebook’s digital coin
A few weeks ago, Facebook launched its own digital money, and it has made ambitious promises. The company said that “Libra is a simple global currency and financial infrastructure that empowers billions of people.”
Three things make Libra different from other cryptocurrencies that are already existing including bitcoin as Facebook said: It is built on a secure, scalable, and reliable blockchain; it is backed by a reserve of assets designed to give it intrinsic value; the independent Libra Association governs it tasked with evolving the ecosystem.
“The Libra currency is built on the “Libra Blockchain.” Because it is intended to address a global audience, the software that implements the Libra Blockchain is open source — designed so that anyone can build on it, and billions of people can depend on it for their financial needs. With the proliferation of smartphones and wireless data, increasingly more people will be online and able to access Libra through these new services. To enable the Libra ecosystem to achieve this vision over time, the blockchain has been built from the ground up to prioritize scalability, security, efficiency in storage and throughput, and future adaptability,” reads their official announcement.
However, amidst global campaign launched by Facebook to build credibility for Libra, many analysts and government officials have expressed their concerns regarding how the new digital coin would impact global economics as well as raised trouble over Facebook’s reputation concerning data security.
Governments raised concern over Facebook’s Libra
European officials have also expressed concern regarding Libra, citing that the system, if widely adopted, could shake the global economy and rival national banks. French Finance Minister Bruno Le Maire sent a letter to officials from the G7 and International Monetary Fund calling for a group to examine Libra’s impact on the global financial system. Le Maire said that Libra must not become a “sovereign currency,” while a German politician noted Facebook’s potential to become a “shadow bank” to the global financial system.
American lawmakers also have their eyes on the recent project of Facebook. US Representative Maxine Waters, chair of the House Financial Services Committee, asked Facebook to halt work on the unit it answers questions about privacy and security.
Only yesterday, President Donald Trump said that he is not a “fan” of cryptocurrencies, asserted that America has only one currency, criticized bitcoin, as well as told Facebook that they need a banking charter if they want to launch their newly announced crypto-based money called Libra.
Trump said cryptocurrencies are not money, and “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”
“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations,” said the president.
According to the President, the dollar is the only currency in America, and Libra, among other cryptocurrencies, are not “real money.”
“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” Trump said in a tweet.