ECB Executive Board member: Libra poses a threat to European monetary policy and weakens central bank control

According to recent media reports, the European Central Bank (ECB) Executive Committee member Yves Mersch warned that Facebook's Libra poses a threat to European monetary policy and cryptocurrency consumers.

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According to Reuters, Mersch said on Monday:

"(Libra) may weaken the ECB's control over the euro, weaken the monetary policy transmission mechanism and weaken the international role of the single currency by affecting the liquidity of banks in the euro zone."

Mersch said that the central nature of Libra is also "extreme" concerns. Libra plans to use it as a stable currency linked to a basket of legal tenders and government bonds, and is managed by a dedicated Libra Association. He stressed that this currency will be accountable to stakeholders, triggering trust issues, and will not be supported by a central bank.

He further stated that Libra was launched by Facebook, a company that had previously “had to explain in front of US and EU legislators the threat they pose to our democracy by processing personal data on social media platforms.”

Mersch called on EU regulators to include Libra in their regulation and added that international cooperation is needed to address the risks that this cryptocurrency project may pose.

Finally, he called on Europeans not to give up the security and reliability of "ripe payment solutions and channels, and instead support Facebook's tempting but dangerous and vigilant promise."

Mersch is the latest representative of the European Central Bank to dissatisfaction with Libra's threat to the traditional monetary system. In early July, ECB Executive Board member Benoit Coeure said that Facebook's cryptocurrency "has sounded a good alarm for regulators and the public sector."

“It is impossible to develop them in a regulatory vacuum of financial services activities because it is too dangerous. We must act faster than we can do so far.”

Clay said so at the time.

Also in the European Union, it is reported that Facebook has been investigated by the European Commission for antitrust issues in the Libra project.