Facebook’s plans for its Libra cryptocurrency have been met with a further setback today, after the central bank of Japan called for “global cooperation” in regulating the stablecoin, Reuters reported.
In speaking out against the stablecoin, the Bank of Japan has become the latest global central bank to highlight the need for strict regulation of the project, as the global scrutiny on Facebook’s proposals continues to intensify.
The remarks were made by the bank’s Governor, Haruhiko Kuroda, at a forum for business leaders in Osaka this week. Calling on regulators to apply the highest standards of compliance to the project, Kuroda said the stablecoin could have significant implications.
If Libra is introduced, it could have a huge impact on society.
The cryptocurrency, set for launch in 2020, has met with opposition from regulators and central banks around the world in recent weeks, with France and India amongst the most notable in their criticisms of the proposals.
French Finance Minister Bruno Le Maire said the European Union would need to form a unified response to regulating Libra, while regulators in India expressed their own concerns about the implications Libra could have on the mainstream financial system.
The move from Japan presents a challenge on yet another front for Facebook, which remains determined to roll out its cryptocurrency internationally with the backing of local regulators and authorities on a country-by-country basis.
The strict approach recommended by the Bank of Japan comes as little surprise, after several months of increasing regulatory standards on cryptocurrency in the country.
Home to several high profile exchange hacks, not least the $450 million hack leading to the spectacular collapse of cryptocurrency exchange Mt. Gox in 2014, authorities in Japan have been keen to apply robust standards to regulating the crypto sector.
New rules banning crypto margin trading were also introduced earlier this year, with industry regulator the Financial Services Agency (FSA) now working on a new, more comprehensive framework for regulating crypto wallets.
With battle lines being drawn for Facebook’s Libra in Japan and elsewhere, it remains to be seen whether the firm can overcome these barriers to launch its project as intended in 2020.
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