As Libra continues to dominate conversation across many central banks and regulators, Bank of Japan Governor Haruhiko Kuroda has come out in defense of Libra – somewhat – calling for global cooperation on its regulation.
Libra has mostly faced obstacles and indignation from the global regulatory community. The likes of France and Germany this month have put up active barriers to stop the development of the cryptocurrency in Europe. On top of this, the US is still steadfast in its opposition to Facebook launching such a financial system, and China and India want nothing to do with it.
Yet, Japan, a country which has been mostly supportive of Libra, has now called on the global community to cooperate as: “If Libra is introduced, it could have a huge impact on society,” said Kuroda.
However, through Kuroda, is in no way insinuating that Libra should have free reign in its launch, the point the governor is trying to make is that the regulatory standards still need to be high. However, they need to be well defined and coordinated.
Kuroda’s point echoes what has been asked for a lot in the cryptocurrency space. Since the ecosystem has been pushing to be accepted in the mainstream, there has been much demand for clear and defined rules and regulations.
Libra faces a challenge of trying to launch a centralized coin across the globe, and because of its high profile, it needs to adhere to several rules and regulations emanating from hundreds of countries. This would almost be impossible to achieve, and thus, as Kuroda suggests, there needs to be a joint effort to set the rules for Libra globally.
The issue, already, is that some countries are already shutting up their doors and want nothing to do with Libra and thus would surely not be privy to joining in on a global cooperative regulatory effort.
France and Germany have stated that Libra is a threat to national currency sovereignty; however, their reasoning is quite flawed. Facebook’s coin is a stablecoin and thus is pegged to the national currencies; it will be backed by physical currencies stored in a vault, and this is not a new form of money like many nations believe.
Regardless, these nations are adamant that they will not be part of helping Libra launch, and despite all the calls from more progressive nations – like Japan – it appears that this global cooperation for the sake of Libra will not be realized, and will probably put a handbrake on something that could have a considerable impact on the world.