FRANKFURT, Germany—The European Central Bank is being advised by ECB board member Yves Mersch that Facebook’s Libra could affect its ability to set monetary policy.
“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 by affecting the liquidity position of euro area banks, and undermine the single currency’s international role,” Mersch told Reuters.
Since it is not backed by a lender of last resort and must be accountable to shareholders, public trust cannot be counted on, Mersch added.
“It is scheduled for release in the first half of 2020 by the very same people who had to explain themselves in front of legislators in the United States and the European Union on the threats to our democracies resulting from their handling of personal data on their social media platform,” Mersch said in the Reuters interview.