TOKYO (Reuters) – the Central banks, the impact of the monetary policy to reduce substantially, if Facebook’s Scale is cryptocurrency that is used on a large scale in their respective countries, and a former Bank of Japan executive, warned on Thursday.
Representations of virtual currency are to be displayed on the front of the monitor the logo in this illustration picture the 21 of June, 2019 at the latest. REUTERS/dado Ruvic/Illustration
Global policy makers have raised the alarm about Facebook Inc’s (FB.(O) a plan for the problem of Scale, worried that the tech giant’s ambition for a new global cryptocurrency that can weaken their control over the monetary and banking policy.
“If the Scale is being used more and more in the sovereign currency of a particular country, the impact of monetary policy could be seriously undermined,” said Hiromi Yamaoka, the former head of the BOJ, the distribution of and the supervision of payment and securities settlement systems.
As Yamaoka does not say whether or not he thought that the Scale would to succeed as a cryptocurrency or not, he said, is that its adoption can cause, or speed up capital flight in a country where the market confidence in the currency is low, as it will give users an easy way to make money from it.
“It won’t be a big problem for countries that have a strong market confidence in their currencies,” Yamaoka said.
“Still, the rise and rise of the monitor would be the pressure on the decision makers of the discipline itself,” and to make sure that they do not take measures that impair the value of its currency, he told Reuters.
Currently a member of the board at THE consulting firm of Future Corp. (a), Yamaoka surveyed in the BOJ’s survey on digital currencies, and is well-versed in cryptocurrencies.
Under the Facebook plan, the balance would be made up by a pool of real assets, such as bank deposits and short-term government securities, which would be expressed in terms of the major currencies.
Any change in the composition of the assets move in the markets, including exchange rates, which have been a source of concern for policy-makers who are on the currency policy, Yamaoka said.
Policy-makers need to coordinate regulation globally, this is a new payment tools allows money to cross borders easily, ” he said.
“There is contradiction in the rules between the countries and a loophole in the law, so the rules may not be effective,” Yamaoka said.
The G7 finance ministers and central bankers, warned last month that its digital currency, such as the Scale of serious concerns, and would like to be as close as possible, to ensure that they do not get angry, on the world’s financial system.
In spite of concerns about money laundering and the protection of privacy, prohibit the launching of the monitor at all would be difficult and counter-productive, ” he said.
“It may be hard for Facebook to launch a pair of Scales in the first half of 2020, as originally planned. However, it is easy for other managers to do something like that,” he said.
“There is no way to stop the innovation.”
Reporting by Leika Kihara and Takahiko Wada; Editing by bob Holmes