Definitely, Facebook’s announcement of launching Libra is a quite serious concern. After the US’s congressional committee, Bank of Japan is raising a skeptical eyebrow on Libra coin.
Bank of Japan on Libra Coin
The latest report states that the Deputy Governor of Bank of Japan, Masayoshi Amamiya said that the digital currency operator has to comply with regulations on money laundering and risk management. Amamiya told that the operator should comply with policies responsibly and act as a provider of safe and secure payment settlements. He said that;
“As for Libra, we must bear in mind that the potential global user-base could be enormous,”
Beside adding criticizing comment on Libra, he mentioned that Bank of Japan is introducing a digital currency.
More on the point of digital currencies, he said that negative interest on virtual currencies would urge people to come back to cash again. Continuing that he said, no Govt would actually opt to replace cash into digital currency.
“To overcome the nominal zero lower bounds, central banks would need to eliminate cash…Eliminating cash would make settlement infrastructure inconvenient for the public, so no central bank would do this.”
If central banks issue digital currencies and apply negative rates on them, households and companies will hold cash instead to avoid being charged for holding digital currencies, #BOJ Deputy Gov. #Amamiya told a #ReutersNewsmaker forum.https://t.co/AHLCqctIq3 @Reuters
— William Mallard (@BillyMallard) July 5, 2019
Bank of Japan isn’t the only bank raising the voice on Facebook’s entry into the financial system – there’re many global regulators and financial leaders who think Facebook has to align with high standard regulatory policies.
So far, Japan is known for a broader approach to crypto industry – the infrastructure, crypto exchanges, and bitcoin-accepting merchants. However, the latest remark by Amamiya seems quite disturbing. Amamiya outlines that;
“If central bank digital currencies replace private deposits, that could erode commercial banks’ credit channels and have a negative impact on the economy”