In a daily news report on Monday, the European Central Bank indicated it is receiving guidance from ECB board member Yves Mersch. This is about Facebook’s Libra affecting its ability to set monetary policy.
Mersch said, “Depending on Libra’s level of acceptance and the referencing of the euro in its reserve basket, this could reduce the ECB’s control over the euro.”
He also added, “It will also impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks. It will also undermine the single currency’s international role.”
Earlier this year, Facebook announced Libra as its plans to offer the digital coin. It will be as a way to make payments independent of nationally issued money.
Mersch noted that, like nationally issued currencies, Libra is highly centralized. But unlike conventional digital coins, it does not receive support by a lender of the last alternative. It is ultimately only accountable to shareholders.
The planned digital coin will release in the first half of 2020 by the very same people. They are the ones who will be explaining themselves in front of legislators in the United States and the European Union.
The explanation will be regarding the threats to our democracies. These threats have been resulting from their management of personal data on their social media platform.
Control Over Libra Crypto
Given these trials, European regulatory and supervisory authorities need to proclaim jurisdiction over Libra. Moreover, the garner global cooperation alleviated its risks.
In a statement, Mersch said, “I sincerely hope that the people of Europe will not be tempted to leave behind the safety together with the soundness of established payment solutions.”
Meanwhile, Facebook said it merely wants to give the 1.7 billion people in the world without access to a bank account the capacity to have one. The access will be at a low-cost charge or by no fee at all.
The most common complaint of the digital currency and blockchain enthusiasts received a mention. It is by way of a bitcoin booster and general crypto luminary Charlie Shrem.
He started to forget about the 1.7 billion unbanked. Facebook is really after unsettling and destroying bitcoin to be exact is with the blockchain innovation in general. This is with an artificial offering of its own, the Libra digital coin.