ECB’s Mersch Says Siren of Libra Is Beguiling But Treacherous
In a speech at the ECB’s legal conference in Frankfurt on Monday, Mersch argued that private currencies have little or no prospect of establishing themselves as viable alternatives to centrally-issued legal tender. Only an independent central bank can give money the institutional backing needed to make it reliable and able to win public trust, he said.
Euro-zone policy makers sounded the alarm over Libra ever since Facebook unveiled its plans in June. French central bank governor Francois Villeroy de Galhau has warned that it raises serious questions about money-laundering and data protection, while Mersch’s Executive Board colleague Benoit Coeure, who chairs an international working group on Libra, said a prolonged discussion among regulators may be needed before it can launch.
European Union antitrust authorities are also conducting an early-stage probe examining how Libra will be run and how the new payment system will work.
Bank of England Governor Mark Carney recently laid out a radical proposal for an overhaul of the global financial system that would eventually replace the dollar as a reserve currency with a Libra-like one, stealing the march on digital currencies.