Facebook’s Libra continues to face resistance from institutions across the globe. Yves Mersch, ECB Board Member, was the new entrant to join the list of Libra’s critics.
Yves Mersch, who is a former Governor of Luxembourg Central Bank, believed that the proposed virtual asset’s launch could weaken European Bank’s ability to introduce monetary policies and stated that the rest of Europe should avoid its “treacherous promises.”
“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.”
He also raised concerns about its centralized nature. Since Libra’s value was not backed by any substantial asset, the accountability would fall on the shoulders of the shareholders in an event of a setback. According to Mersch, Libra’s investors were not seen as “repositories of public trust.”