Japanese regulator approves Libra as it's "unlikely to be a crypto"

01 Jul, 2019
by David Robb
Regulation
Japanese regulator approves Libra as it's unlikely to be a crypto

Japan's leading financial authority has claimed that Facebook's Libra project will probably be approved. Nikkei reports that the FSA sees no legal obstacles with Libra as it doesn't technically consider it to be a cryptocurrency.

According to a statement from the regulator, Libra "is likely not to be a cryptographic asset (virtual currency)." This is because the token will be a stablecoin, backed by a number of different fiat currencies including the US dollar as well as the Japanese yen. 

As its volatility will be low and it will not be used for speculation or any other activities that could destabilize the national economy, Libra shouldn't struggle with regulatory difficulties in Japan. The FSA indicates a belief that Libra will likely be used for international monetary remittances and general transactions.

Meanwhile, the U.S. could adopt a different approach towards Facebook's upcoming stablecoin. In response to the whitepaper's release on June 24, both the Senate and Congress scheduled hearings to be held on the subject, on July 16 and 17, respectively.

Japan's regulatory stance on crypto has generally been permissive, although not to the same degree as other east Asian countries. Towards the end of May, authorities passed amendments to existing virtual currency legislation, requiring cryptocurrency exchanges in Japan to apply for a license in order to operate, as well as putting limits on crypto margin trading.

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