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Facebook's Libra could hurt the ECB and the euro


Facebook's Libra could hurt the ECB and the euro

Frankfurt (AFP)

A strong adherence to the cryptocurrency "Libra" announced by Facebook could harm the monetary policy of the euro area and the single currency, said Monday a senior official of the European Central Bank.

Libra, the virtual currency-backed currency project programmed by Facebook in June for the first half of 2020, has since sparked the mistrust of central bankers, politicians and regulators around the world.

"Depending on the level of acceptance of the Libra and the weighting of the euro in its reserve basket, this could reduce the ECB's control over the euro, harming the transmission mechanism of monetary policy (.. .) and undermine the international position of the single currency, for example by reducing demand, "warned Yves Mersch, member of the executive board of the monetary institute.

The US giant Facebook hopes to capitalize on its more than two billion users to win in payments, financial services and online commerce.

Mr Mersch hopes that European citizens "will not give in to Facebook's hype" by turning their backs on the security of well-established payment services.

In July, the G7 finance ministers had already alerted the international financial system of the risk of cryptocurrency projects like the Libra.

They could not develop against a backdrop of "regulatory vacuum" for financial services activities, had meanwhile warned Benoît Coeuré, member of the executive board of the ECB, who inherited in July the direction of a group working on crypto assets backed by currencies.

© 2019 AFP

Source: france24

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