Bank of Japan Voices Concerns about Facebook’s Crypto Project

Asia Blockchain Review
July 19, 2019

The Bank of Japan (BoJ) has joined regulators around the world in expressing concerns over Facebook’s permissioned digital currency project, known as Libra.

As reported by CoinDesk, the Japanese central bank is worried that the planned cryptocurrency, backed by a basket of fiat currencies and government securities, would be difficult to regulate and could therefore pose a risk to financial systems.

Wider Adoption of Cryptocurrencies May Affect Existing Systems 

With Facebook linking Libra to multiple national currencies, concerns abound that the social media giant is attempting to circumvent undue control from any single national regulator.

BoJ Governor Haruhiko Kurodo has said he intends to closely monitor whether cryptocurrencies could become more generally adopted as a means of payment, and how this would affect existing financial and payment systems.

A Nikkei report suggested that as users withdraw money to purchase the Libra token from regional banks, Facebook would likely place those reserve funds in Japan’s larger banks to the detriment of minor institutions.

Additionally, a resulting hike in demand for government securities could see falling interest rates that would further threaten Japan’s financial stability.

Governments Worldwide Say No Free Ride for Crypto Projects?

One BoJ official indicated that Facebook would essentially be running its crypto project freely using financial institutions that must expend substantial resources and capital just to maintain compliance with regulators.

Similar fears in the United States have prompted lawmakers to call for a freeze on the Libra project pending its proper assessment.

Regulators in France and the United Kingdom, together with nations such as Singapore, have also raised concerns over the project.


About Asia Blockchain Review

Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. It aims to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

Our goal is to cultivate and encourage a collaborative community for our members to gather, share their experiences and endeavors in the blockchain space, and brainstorm the potential uses of blockchain technology.

Follow Asia Blockchain Review on:

Related Article
Central Bank of France: Blockchain Can Answer Market Demands
The first deputy governor of the Central Bank of France says that blockchain can be implemented to c...

December 5, 2019

Red Cross Developing Blockchain-Based Currency for Aid Distribution
Three national units of the Red Cross plan to use blockchain-based currencies instead of cash and vo...

December 5, 2019

Australia’s Monash University Launches Blockchain Research Center
Australia’s Monash University has unveiled a research center that will focus on blockchain innovatio...

December 4, 2019

JPMorgan Tests Blockchain System for Tracking Cars
JPMorgan is developing a blockchain-based system to track the automobile inventory of car dealers ob...

December 4, 2019

We provide information about Asia Blockchain Review latest activities as well as global blockchain news and research. Subscribe to our Newsletter now or Contact us