Facebook announces its currency in 2020, the ECB goes into the slot
Facebook announces its currency in 2020, the European Central Bank (ECB) rises to the niche
Libra, the future currency of Facebook is scary? Maybe not, but assuredly, it makes banks and other conventional bodies chilly.
Facebook, accompanied by 27 giants ranging from secure payment to online commerce, announced in June the arrival of “Libra”, its virtual currency. For the ECB, the cryptocurrency of one of the powerful Gafa’s (1) members could hurt the Euro. How?
For Yves Mersch, a member of the Executive Board of the ECB, Libra to be backed by a basket of reserves (a first for a virtual currency), “depending on the degree of acceptance of the Libra and the indexation of the Euro in its reserve basket, this could limit the ECB’s control over the Euro. “
To say how seriously the ECB takes this matter, Monday 2 September, Yves Mersch gave his opening address to Libra on legal issues in the Eurosystem. According to him, Libra could affect the position of banks related to the euro in terms of liquidity and “undermine the international role of the single currency, for example by reducing the demand”
The Executive Board member of the ECB also believes that the future currency has a centralized side that is similar to a “cartel”. Yves Mersch thinks in particular the loursd weight of payment that accompany Facebook in this project. Among them: Visa, Mastercard, Paypal. And the ECB by its way of reminding that money and national sovereignty are inseparable (hence the importance of a strong central bank).
In his speech, a real step up against Libra, Yves Mersch concludes: “I sincerely hope that European citizens will not be tempted to give up the security and the solidity of the solutions and payment systems established for the benefit of seductive promises. “
As Africans, what can we conclude about this communication from the ECB on Facebook’s future currency?
Behind Libra, looming stakes on the consumption patterns of tomorrow with Africa in the center. We will explain to you better why in our articles to come. Stay connected with us in Facebook and Instagram to not miss anything!©Dzaleu.com
* GAFA: acronym for the giants of the Web that are Americans Google, Apple, Facebook and Amazon