ECB President: Facebook may use its platform to give Libra an unfair competitive advantage

New European Central Bank President Christine Lagarde said in a letter to EU lawmakers yesterday that he was worried that Facebook might use its social media platform to promote Libra and "close the door" to its stablecoin rival. Lagarde said that stablecoins solve many problems associated with existing cross-border payment systems and provide users with a cheaper and more efficient payment method that can help promote financial inclusion. But she stressed that regulators will have to address concerns about competition in the stablecoin market. Facebook may have an unfair advantage over small operators because it can use its social media platform to block competitors and promote its own cryptocurrency. She also emphasized that Facebook can combine users' social media data with financial data to give them "a strong competitive advantage and disrupt market competitiveness." Until the regulator fully evaluates the relevant risks, stablecoins such as Libra should not be put into operation. Despite its efforts, Libra's transboundary nature means that international coordination is needed to ensure consistency. Lagarde also said that the name "stable currency" is misleading. Operators may promise a stable store of value to their holders, but their prices depend on corporate governance and anchored underlying assets. However, investors may not realize that the value of the stablecoin they hold is uncertain.