Global Bank Official Warns: Facebook’s Cryptocurrency Project a Real Danger

A high-ranking European Central Bank (ECB) official recently outlined a number of problems he found with Facebook’s planned cryptocurrency Libra.

His critique is the latest in a number of warnings from various government officials around the globe. 

“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,” said Yves Mersch, a Luxembourg member of the ECB’s executive board. 

During a speech at a Frankfurt legal conference, Mersch noted that Libra was being produced from the “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,” a reference to Facebook’s recent testimonies in front of various governments.

Mersch raised a concern that Libra coins will be issued by a cartel of technological giants.

Big tech companies are spread throughout the fields of financial tech, e-commerce and telecommunications. Members of the Libra Association include Mastercard, PayPal, eBay, and Uber. 

“With such a setup, it is difficult to discern the foundational promises of decentralization and disintermediation normally associated with cryptocurrencies and other digital currencies,” he said.

“On the contrary, similarly to public money, Libra will actually be highly centralized, with Facebook and its partners acting as quasi-sovereign issuers of currency.” 

Global concern

Public fiat currency also is centralized but, unlike Libra, it’s backed by what Yves calls a  “sovereign entity and a central issuance authority.”

Mersch fears that corporate entities accountable only to their shareholders will abuse their privileged access to private data contained in a potential Libra ecosystem. 

European policy makers aren’t the only ones concerned with Facebook’s cryptocurrency. In April 2018, the Reserve Bank of India banned all regulated entities from dealing in cryptocurrencies. 

Subhash Garg, India’s Economic Affairs Secretary told Bloomberg that the “design of the Facebook currency has not been fully explained. But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”

Recommended Articles

Delaying Retirement Can Potentially Delay Dementia

They say that retirement should be viewed as a new life adventure. But it is really a budgeting lifestyle for post-working life. And there are a lot of considerations to

Attention Ladies: These Herbs Are Important to Your Health

Women have so many demands on their bodies and minds that any relief is a blessing. That is why you need to start taking these herbs to help increase your

4 Rules That Will Bombproof Your Retirement

Financial markets often are directly correlated to the macroeconomic, social and political factors far out of our control. Herds of investors are prone to reacting in extremes whenever these macro

4 Types of Retirement Income That Will Be Taxed

As well all know, expenses may change from one year to the next, and the amount you spend may change throughout retirement as well. That's why, for many current and

Study Finds Risks of Two Commonly Taken Antidepressants

Depression is a serious mental illness — one that affects more than 15 million adults in the U.S. For some women, pregnancy can bring about new depression symptoms, or worsen

Live Near Water? You Probably Paid Too Much for Your House. Here’s Why (Map)

Even a cynic recognizes that opportunity is a key to prudent business timing. Consider home buying. If you’re in the market for a new home, and are informed and discerning

3 Reasons to Should Avoid Life Settlement Policies

Most Americans don’t take life insurance for granted because almost one out of every two Americans don’t have it. According to the Insurance Information Institute, only about 54% of Americans

Feeling Hangry? How to Avoid Food-Related Mood Swings

Food that you eat is processed into simple sugars, free fatty acids and amino acids. The nutrients are moved into the bloodstream where they are assimilated by organs, tissues, and

How to Put Your Investments On Autopilot — and Win

Are you committed to investing a part of your monthly income towards retirement? You can insulate your financial future against unforeseen emergencies and economic risks if you use an automatic

Best Time to Sell or Buy a Home? It Depends…

When's the best time to buy or sell a home? That's a great question. A lot depends on who you are, seller or buyer. Traditionally, the best time of year

6 Sneaky Habits That May Be Causing Your Overeating

Overeating? Many people vastly underestimate how many calories they consume in a day. Even if you believe you restrict your daily calorie consumption, you may be consuming more calories than

How Shark Tank Judge Barbara Corcoran Nearly Lost $400,000 — Just by Reading an Email

According to a 2017 FBI Internet Crime Report, individuals and companies lost over $5.5 billion between 2013 through 2017 due to email phishing scams. Email phishing scams are deceptive emails