After the many warnings about Facebook's Libra stable cryptocurrency project (see EUROPE 12299/11), it is now the turn of the European Central Bank (ECB) to join the fray.
On Monday 2 September, Yves Mersch, Member of the Executive Board of the European Central Bank (ECB), at the European System of Central Banks’ Legal Conference in Frankfurt am Main, sounded the alarm and highlighted the role of central banks as guardians of public trust.
“Depending on Libra’s level of acceptance and on the referencing of the euro in its reserve basket, it could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism (…) and undermine the single currency’s international role” he warned.
According to him, “regulatory intervention” is necessary, either to confirm the classification of Libra as electronic money, a financial instrument or a cryptocurrency, or to create a regime adapted to the specific case.
But in any case, in Mr Mersch's view, only a central bank can provide the institutional support necessary to issue “reliable forms of money”.
“I sincerely hope that the people of Europe will not be tempted to leave behind the safety and soundness of established payment solutions and channels in favour of the beguiling but treacherous promises of Facebook’s siren call” he concluded. (Original version in French by Marion Fontana)