TOKYO (Reuters) – Central banks may see the impact of their monetary policies diminish significantly if Facebook’s Libra cryptocurrency becomes widely used in their countries, a former Bank of Japan executive warned on Friday.
Global policymakers have raised alarm over Facebook Inc’s plan to issue Libra, concerned that the tech giant’s ambitions for a new global cryptocurrency may weaken their control over monetary and banking policies.
Libra - Currency - Country - Effect - Policy
“If Libra becomes more widely used than the sovereign currency of a particular country, the effect of monetary policy may be severely undermined,” said Hiromi Yamaoka, former head of the BOJ’s division overseeing payment and settlement systems.
While Yamaoka did not say whether he thought Libra would succeed as a cryptocurrency or not, he said its adoption could trigger or accelerate capital flight in countries where market trust in their currencies is low, as it gives users an easy way to move money out.
Problem - Countries - Market - Trust - Currencies
“It won’t be a big problem for countries that enjoy strong market trust in their currencies,” Yamaoka said.
“Still, the emergence of Libra would pressure policymakers to discipline themselves,” and ensure they don’t take measures that undermine the value of their currencies, he told Reuters.
Board - Member - IT
Currently a board member at IT...
Wake Up To Breaking News!