Now Japanese Regulators Are Getting Anxious About Facebook’s Cryptocurrency

Japan’s central bank has joined the regulators worldwide expressing concerns over the potential risks posed by Facebook’s Libra cryptocurrency project. A report from Nikkei Asian Review on Wednesday indicates that the Bank of Japan (BoJ) has concerns that Libra – a planned cryptocurrency backed by a basket of fiat currencies and government securities – will be tough to regulate and could bring risk to the financial system. Nikkei cited as unnamed official from the BoJ as recently saying: The report suggests that by linking Libra to more than one national currency, Facebook may be trying to avoid undue control from any single nation’s regulators. The Bank of Japan’s governor, Haruhiko Kuroda, has said he intends to “keep careful watch” on whether cryptocurrencies could become generally adopted as a means of payment, and how existing financial and payment systems might be affected. The report further posits that, as Libra users withdraw money to buy the token from regional banks, Facebook would likely place those reserve funds in Japan’s larger banks, resulting in a flow away from more minor institutions.