Ex-Japanese Bank Executive: Libra Will Destabilize Monetary Policy

Ex-Japanese bank executive from the central bank recently issued a warning note to central banks around the world because he stated that Facebook’s cryptocurrency could threaten the power that the banks have over their various monetary policies. We are reading more about it in the latest cryptocurrency news today.

Libra has not really had good days since its introduction because many jurisdictions are questioning the motive of the stablecoin. Some of the regulators have already asked the social media company to stop the developments of the project because they need more time to study the cryptocurrency before they come to a conclusion. Back in 2019, the Bank for International Settlements warned that the facebook cryptocurrency Libra could be a threat to the global financial system but according to the Libra whitepaper, the stablecoin offers low cost and fast payment system.

In addition, the digital currency will provide financial access to more than two billion unbanked people in the world. The report also shows that the BIS believes Libra services could bring about the monopoly and in the end could render the Wall Street Banks as ineffective. The ex-Japanese bank executive who was in charge of the bank’s research into bitcoin and other cryptocurrencies also issued a warning but this time to central banks.
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According to him, the global adoption of Facebook’s libra could threaten the control the banks have on monetary policies. He stated:

 “If Libra becomes more widely used than the sovereign currency of a particular country, the effect of monetary policy may be severely undermined.”

The ex-Japanese banker who has deep knowledge in virtual currencies also stated that a regulatory framework that is universal is very important because the individuals can easily send and receive bitcoin and other cryptocurrencies anywhere in the world. However, the countries without uniform regulation will weaken the enforcement of the regulations. While the Libra crypto project is not really shaking governments with stable currencies, Yamaoka stated that the cryptocurrency could bring the policymakers to be more disciplined and careful not to take steps that would devaluate other fiat currencies. As we read in the altcoin news previously, many regulators and governments across different jurisdictions expressed concerns ranging from the ability to ensure data privacy and its turbulent past with the regulations.