Europe must ignore the "treacherous promises" of the balance of Facebook on Facebook: Mersch of the ECB

FILE PHOTO: The virtual currency representations are displayed in front of the Libra logo in this illustration image, June 21, 2019. REUTERS / Dado Ruvic / Illustration / Photo File

September 2, 2019

FRANKFURT (Reuters) – Facebook The currency proposed by Libra could compromise the ability of the European Central Bank to define its monetary policy and Europe should ignore its call for the "siren of" treacherous promises, "said Monday Yves Mersch, member of the board of directors of the ECB.

Facebook has announced Libra – a new digital coin backed by four official currencies and available to billions of social network users worldwide – earlier this year, announcing the launch of its launch next year.

"Depending on the level of acceptance of the Libra and the referencing of the euro in its reserve basket, this could reduce the ECB's control over the euro, adversely affect the transmission mechanism of the euro. monetary policy by affecting the liquidity position of euro area banks and undermining the single currency. international role, "added Mersch.

Like ordinary currencies, Libya would be highly centralized, a configuration "extremely worrying" since it does not rely on a lender of last resort and that it is ultimately accountable to shareholders, who are not considered as repositories of public trust, added Mersch.

"It is expected that this document will be released in the first half of 2020 by the same people who have had to explain to the legislators of the United States and the European Union about the threats to our democracies the processing of their personal data. multimedia platform, "added Mersch.

Given these challenges, European regulators and supervisors must exercise their jurisdiction over Libra and also need global cooperation to mitigate its risks.

"I sincerely hope that European citizens will not be tempted to leave behind the security and soundness of established payment solutions and channels in favor of the alluring but treacherous promise of the siren's call. Facebook, "added Mersch.

(Report by Balazs Koranyi, edited by Peter Graff and Louise Heavens)