Facebook’s Libra cryptocurrency could disrupt global financial order

The Yomiuri ShimbunThere is a possibility of significant changes in the global financial order. Each country should work in close cooperation to clarify problems and swiftly prepare international rules to deal with them.

U.S. social networking giant Facebook Inc. announced a plan to launch its own cryptocurrency called Libra in 2020, which has caused a stir.

Competition for digital advertisements, which support profits, is fierce. Facebook appears to be aiming to enter a new field and enhance its revenue base.

Unlike ordinary cryptocurrencies that are traded for speculative purposes and whose prices fluctuate, Libra is said to be backed by legal tender, such as the yen and the dollar.

The main operators of Libra, including Facebook and a leading credit card company, would manage cash in exchange for issuance of the cryptocurrency, by using high-security bank deposits and short-term government bonds. Facebook said it would try to keep the price stable through these methods.

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