EU: ECB’s Mersch warns Libra is ‘Facebook’s Siren Call’

Yves Mersch, European Central Bank’s key legal official, said that Facebook’s Libra stablecoin is “beguiling but treacherous” during a speech at the ECB’s legal conference in Frankfurt on Monday.

Bloomberg reported on Mersch’s remarks in an article published on September 2. He said that private currencies have little or no prospect of establishing themselves as viable alternatives to centrally-issued legal tenders.

He believes that only independent central banks can grant sufficient institutional banking to make a currency reliable and win public trust. He further noted “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 favor of the beguiling but treacherous promises of Facebook’s siren call.”

Like regular currencies, Libra would be highly centralized, an “extremely concerning” setup since it is not backed by a lender of last resort and it is ultimately accountable to shareholders, who are not seen as repositories of public trust, Mersch added.

Full Content: Bloomberg

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