ECB warned Facebook’s Libra cryptocurrency could undermine its ability to set monetary policy

Yves Mersch, a board member of the European Central Bank, has called for Europe to ignore the “treacherous promises” of Facebook’s cryptocurrency Libra.

The social media giant announced the cryptocurrency project in June 2019. Since then, lawmakers around the world have expressed their concerns about Libra. Mersch added his voice to these worries on Monday September 2.

He argued that Libra could, by keeping the euro in its reserve risked, reducing “the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks and undermine the single currency’s international role,” according to Reuters.

He also pointed out that Libra was backed and set up “by the very same people who had to explain themselves in front of legislators in the United States and the European Union on the threats to our democracies resulting from their handling of personal data on their social media platform.”

Libra has faced concerns from authorities in several different countries. For instance, in August, regulators in the UK, Australia, the USA, Canada, Burkina Faso, Albania and the EU signed an open letter asking the social media giant to be more transparent about its digital currency and its infrastructure.

Seemingly responding to these concerns, Facebook recently hired FS Vector, the public policy advisory firm, to lobby on Libra’s behalf in Washington.

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