Yves Mersch, board member of the European Central Bank (ECB), believes that Facebook’s Libra cryptocurrency could undermine the regulator’s control over the euro and the international role of the European currency.
ECB board member: Libra will be centralized and highly controversial
According to Reuters, a board member of the European Central Bank has expressed many concerns about Facebook’s social network plans for the release of Libra cryptocurrency.
"Depending on the level of implementation of Libra and the amount of euros in its reserves, it can reduce the ECB’s control over the euro, weaken the transmission mechanism of monetary policy, affecting the liquidityLiquidity
– is a term that means the ability to sell any financial assets (below or above the market price). The term “liquidity” in Latin means “liquid”, “flowing”.Details of eurozone banks, and undermine the international role of the single currency," Mersch said.
The official is also confident that Libra will be fully centralized and that the project will only report to shareholders who are not "considered as custodians of public trust".
And the founders of Libra constantly fall into scandals about the storage and use of users' personal data, says Mersch. Therefore, regulators should "evaluate" the project and work together with international partners to "mitigate the risks".
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- Facebook revealed plans about Libra in June 2019. Since then, the social network has met with fierce criticism of the authorities
- In the United States, Facebook representatives were repeatedly called "to the carpet" to the Senate. And the European Commission opened an antitrust investigation against Libra
- Pressure from regulators causes concern among investors of the Libra Association, an organization that develops cryptocurrencies. Among them are such giants as Visa, MasterCard and Uber. In total, the association includes 28 members, and 3 of them, according to The Financial Times, are preparing to leave the project
Editor: Alex Riabukha