Libra Should Comply with Regulations: Bank of Japan Official

Amid the concerns of an array of global regulators, the Bank of Japan (BoJ) has now taken a stand against Facebook’s upcoming cryptocurrency Libra Libra Libra is a yet-to-be-released cryptocurrency proposed by Facebook, Inc., that will aim to serve as a global payment system and a stable financial infrastructure that people across the world can use. The projected release date of the libra cryptocurrency is currently slated for 2020, while the project is currently being managed by the Libra Association.Headquartered from Geneva, Switzerland, the Libra Association main purpose is founded on three pillars.This includes the provision of a framework Libra is a yet-to-be-released cryptocurrency proposed by Facebook, Inc., that will aim to serve as a global payment system and a stable financial infrastructure that people across the world can use. The projected release date of the libra cryptocurrency is currently slated for 2020, while the project is currently being managed by the Libra Association.Headquartered from Geneva, Switzerland, the Libra Association main purpose is founded on three pillars.This includes the provision of a framework Read this Term.

Masayoshi Amamiya, deputy governor of the Japanese central bank, on Friday, warned the social media giant that all digital currencies must comply with the regulations on money laundering and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term, Reuters reported.

Disrupting the banking system

Facebook officially announced its digital currency last month, which raised concern among lawmakers and regulators. Though other digital currencies have been available for years, Facebook, with its 2.78 billion user base, has the potential to disrupt the current financial industry, by making the use of digital currencies mainstream.

The BoJ official thinks that Facebook’s plan to introduce the currency is risky and warned central banks to be vigilant about its impact on banking and settlement system.

“As for Libra, we must bear in mind that the potential global user-base could be enormous,” Amamiya told Reuters.

He also revealed that the BoJ had shelved the plan to introduce a digital currency amid the uncertainties in regulations in the sector.

“If central bank digital currencies replace private deposits, that could erode commercial banks’ credit channels and have a negative impact on the economy,” he added.

On the idea of putting negative rates on digital currencies, he said: “To overcome the nominal zero lower bound, central banks would need to eliminate cash...Eliminating cash would make settlement infrastructure inconvenient for the public, so no central bank would do this.”

Amamiya’s warning came only a couple of days after another official from the Japanese central bank raised concerns about the impact of Libra on the financial system.

“It will move money into an absolutely virtual world, so it is completely different than other forms of digital payment,” the unnamed official told Nikkei Asian Review.

Meanwhile, Facebook will face two hearings in the United States this month - one by the Senate and another in front of the House - and have to explain the privacy implications of the upcoming coin.