Japan-based online brokerage firm, Monex Group, has shown interest in joining Facebook’s controversial cryptocurrency project, Libra. The firm owns a range of cryptocurrency exchanges, but also owns the hacked Japanese cryptocurrency exchange Coincheck, has reportedly submitted an application to that effect.
Per the report, the news was announced by Monex CEO Oki Matsumoto at the firm’s Q2 2019 press conference on July 26. The application to join the Libra governing consortium would cost the Monex Group about $10 million, according to the criteria for inclusion in the Libra Association.
Matsumoto is unfazed about the sign-up fees, and is optimistic about Libra’s potentials for the global economy. The released report quoted him as saying that the proposed cryptocurrency possesses “ various possibilities”, and will ultimately promote “financial inclusion” and cross border product sales.
Matsumoto also cited the proven resilience of virtual currencies the world over, acceding that “points and pseudo-currencies are raging”. He also stated that it was better to be on the legal side of cryptocurrencies, instead of continually beating the virtual currencies down.
“The more you try to stop the virtual currency, the more you go underground. I think that this tendency will cede to the idea that reliable operators are better,” Matsumoto explained.
Monex’s application will be reviewed by Facebook by the end of summer, and then the Japanese firm will finalize its decision to be a Libra partner after that. If that happens, Monex will be the first Japanese company in the Libra Association.
Libra Does Not Have Certified Partners Yet
When the Libra efforts were first launched, the gist was that the governing board was already made up of 28 partners- comprising industry giants like Visa, Mastercard, Uber, and eBay. However, subsequent reports have proven otherwise. Earlier this week, CEO of partner company Visa, Alfred F. Kelly, Jr. disclosed that the 28 members are not official partners just yet, but have signed nonbinding letters of agreement.
This begs a burning question– why hasn’t Facebook officially signed up its partners? There are a couple of reasons why this could be so. The delay could be attributed to the regulatory heat Facebook is facing for its crypto venture. The public does not trust Facebook one bit, and neither do regulatory authorities. In fact, most investors would rather buy cryptocurrency like Bitcoin, as volatile and unmanned as it is, than use Facebook’s noble solution.
At a Senate Committee Hearing held for Libra on July 16, Senator Sherrod Brown likened Facebook to a toddler who has gotten hands-on a matchbox and burned the house down severally. This was in reference to Facebook’s many privacy issues and security concerns over user data. UK lawmakers are also looking into the privacy concerns of Libra, so there are more hurdles to be crossed and it seems that the 28 Libra Association constituents do not want in until those are resolved.
Considering that Monex’s forex revenue dropped for the first quarter of its 2019-20 fiscal year by about 4.3 percent, their Libra move may be a redemptive one. The company reported a ¥13.2 billion ($121.5 million) total revenue for the quarter, compared to ¥13.8 billion for the same quarter last year. But seeing as Libra has not even found its own bearings yet, Monex may be waiting for a redemption that may never come.