The deputy governor of Japan’s central bank predicts a large user base for Libra and warns Facebook to comply with money laundering and risk management regulations.
Libra’s ‘enormous’ user base
According to Bank of Japan Deputy Governor Masayoshi Amamiya, Libra could have a high user base in the future. Facebook has to act responsibly, complying with regulations in order to provide safe and secure payment services.
“As for Libra, we must bear in mind that the potential global user-base could be enormous,” Amamiya reportedly said.
During a Reuters event, Amamiya urged central banks to remain vigilant about the impact of Libra on banking and settlement systems.
The BOJ is concerned
The Bank of Japan previously expressed its concerns about Facebook’s upcoming cryptocurrency.
CCN reported on Wednesday that the Asian country’s central bank deemed Libra a significant risk to the existing financial system.
The reason the Bank of Japan is worried is due to the fact that Facebook’s Libra will be pegged to multiple fiat currencies. Therefore, the regulators of individual countries will have little to no regulatory influence over the cryptocurrency.
Facebook is expected to invest a part of its Libra profits in government securities, and its cryptocurrency can cause interest rate volatility and have a destabilizing effect on the world economy, according to the BOJ.
Harsh regulatory scrutiny
Other countries are on the same page as Japan, imposing strict regulatory scrutiny on Facebook because of Libra.
In June, CCN reported that the governor of France’s central bank, Francois Villeroy de Galhau, announced that his country is forming a task force with G7 nations to regulate Libra.
CCN also reported on recent events in which Congress demanded Facebook to “immediately cease” its work on Libra and halt the launch until the government says otherwise.
The congressional halt is the result of a call for a moratorium by numerous non-profit organizations – including Americans for Financial Reform to Public Citizen and Consumer Reports – that have signed a petition.
According to the non-profits, the U.S. government has to first evaluate whether Facebook’s coin is “too dangerous” to be released to the public. Signers of the petition argue that the tech giant’s cryptocurrency could have drastic consequences on law enforcement, online privacy, and consumer protection.
I think it’s a harmful way of driving people to Bitcoin. Even if Facebook users learn about Bitcoin's value through Libra, for many people, this realisation will come AFTER their transactional data is exploited by tech giants selling their surveillance tool as a "cryptocurrency". https://t.co/TNCtELx04I
— Lina Seiche (@LinaSeiche) July 4, 2019
Facebook plans to launch Libra in 2020.