Japan's leading media conglomerate warns against Facebook's cryptocurrency 'Project Libra

In an editorial published by Japan's leading media conglomerate newspaper 'The Yomiuri Shimbun', red flags have been raised about Facebook's venture into the cryptocurrency world with the veil being lifted into the secretive 'Project Libra'.

Singapore, July 19 : In an editorial published by Japan's leading media conglomerate newspaper 'The Yomiuri Shimbun', red flags have been raised about Facebook's venture into the cryptocurrency world with the veil being lifted into the secretive 'Project Libra'.

The Japanese paper warns that Facebook's cryptocurrency, Libra, "could pose a threat to state sovereignty in the issuance and management of currencies, and become an uncontrollable cryptocurrency beyond the surveillance of authorities."

Libra would rely on blockchain technology to facilitate transactions between parties with zero or very low fees for each transaction. According to a white paper released by Facebook, this would be open source technology and would also ensure that user's privacy remains intact and not mingled with existing Facebook data.

Today's alarmist editorial by one of Japan's leading dailies published out of Tokyo comes on the heels of the social media giant's announcement of its plans to launch their own cryptocurrency, Libra ,in 2020. Facebook also announced a 'digital wallet' which would deal in Libra transactions. The 'wallet' has been named 'Calibra' which would also be launched in 2020.

With the announcement of Facebook's ambitious project, Bitcoin share prices took a bullish turn but soon plunged almost 16% on July 17 after US lawmakers turned their guns on Facebook's new endeavour. According to CNBC, US Treasury Secretary Steve Mnuchin said in a press conference early this week that "Libra could be a tool used by money launderers and terrorist financiers."

Yomiuri Shimbun, in its editorial which was republished by Singapore's leading daily 'The Strait Times, warned that it was reasonable for each country to develop a sense of urgency.

"There are fear that the spread of Libra would hinder the effects of the financial policies of each central bank based on legal tender," added the Yomiuri Shimbun editorial. It further quoted the current US Federal Reserve Board Chairman Jerome Powell's reservations about Libra as evidence that the new proposed cryptocurrency could raise serious concerns for countries.

The newspaper warned that if Libra took off it had the potential to "rock the financial system" if a situation arises where the money is withdrawn from the current financial system and changed into the Libra.

David Marcus, Facebook's head of Calibra (the digital wallet linked with Libra) recently gave a six-hour testimony to US Congress about the proposed cryptocurrency. However, lawmakers were not satisfied with Marcus' testimony with the US House Financial Services Chairwoman Maxine Waters insisting that Facebook CEO Mark Zuckerberg testify on Capitol Hill about the ambitious cryptocurrency project.

( With inputs from ANI )