AtlantisFX | ECB Director Yves Mersch warns of the dangers of the planned Facebook FB.O digital currency Libra. With a corresponding acceptance of the crypto device could the control of the European Central Bank (ECB) on the euro sink, said Mersch on Monday at a conference of the central bank according to speech text. The introduction of the cyber currency could also affect the impact of monetary policy on banks. The international role of the euro may also be undermined, with Libra possibly reducing demand for the single currency.
Facebook (NASDAQ: FB) announced in June that it intends to launch its own digital money called Libra in the first half of next year. The technology is largely unregulated so far. The project raised concerns in the group of seven leading industrialized countries (G7). Unlike the cyber currency Bitcoin, Libra should be a "stable coin", which is based on a basket of several currencies and government bonds and should be less fluctuation prone.
However, according to Mersch, only an independent central bank is able to provide institutional support to issue reliable forms of money and maintain public confidence in them. Private currencies, therefore, have little chance of establishing themselves as viable alternatives to the currencies issued by central banks.