Renowned jurist and European Central Bank’s (ECB) key legal official, Yves Mersch, has weighed in on Facebook’s much controversial proposed global digital currency, Libra, calling it “beguiling but treacherous.”
“Beguiling But Treacherous”
The jurist and lawyer who, until 2012, served as the governor of the Central Bank of Luxembourg and is presently an Executive member of the board of European Central Bank, gave his insights about Libra at the European Central Bank’s legal conference in Frankfurt on Monday, during a speech in which he stated that private digital currencies like Libra show very little or next to nothing possibilities of establishing themselves as a reliable option when compared to government-issued legal tenders. According to Mersch,
“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, ”
Is Facebook Libra Ahead of Time?
Libra has not left the spotlight since it was announced by Facebook in June. Particularly in Europe, the proposed cryptocurrency project received severe opposition and regulatory scrutiny. Regulators around the world see the project as a threat to financial security and international monetary policies. However, this also serves as an eye-opener to central banks on the need for profound technological advancement.
According to Mersch,
The stance of central banks toward modern forms of money is bound to evolve with time. “Central bankers have embraced technological developments in the field of money and will continue to explore helpful new innovations.”
Recently, Mark Carney, Bank of England Governor, believing that the present banking system needs a technological upgrade, recently shared his views on the digital currency. According to Mark, digital currency could lessen the domineering influence of the U.S. dollar on global trade. He said –
“The dollar’s influence on global financial conditions could similarly decline if a financial architecture developed around the new [digital currency] and it displaced the dollar’s dominance in credit markets.”
Mid-August, the Payment System Board of the Reserve Bank of Australia reported that it would steadily work with regional regulatory bodies in order to make sure that necessary regulatory procedures are fulfilled before the launch of any private payment systems in which Libra was included.