The European Central Bank (ECB) is not taking it with stride with the emergence of Libra. Benoit Coeure, the Director of the Bank, made this known on Monday. According to him, the introduction of a cryptocurrency owned by Facebook is likely to affect national fiat such as the dollar.
Although the popular cryptocurrency is still under the scrutiny of US Lawmakers, Benoit believes Libra should be thrown out.
“It’s out of the question to allow them to develop in a regulatory void for their financial service activities, it’s just too dangerous,”
This is not surprising because Europe’s apex bank has been skeptical about cryptocurrency from the onset. The safety of ECB Monetary laws has been the major reason for this as the Bank continued to express its anti-crypto opinions through different directors.
No one is in doubt that a social media giant like Facebook might hit billions of customers around the world. Even though the issue may not be concerns about Facebook’s compliance, there is no doubt that it could create a channel for illegal activities such as money laundering. Financial regulators in Europe and the United States have expressed such fears.
Some have raised the issue of circumventing financial institutions to establish a revolutionary monetary scheme which could be taken advantage of to go around trade restrictions.
Financial authorities think Libra will pave the way for tax evasion and potentially establish an underground financial system.
Facebook, in its response believes that an early introduction is only important so that US Lawmakers can make more research and inquiry into its possibility.
Three years ago, The European Central Bank ruled out Bitcoin’s ability to perform on a global level. The Bank also played down the introduction of Estonia’s Cryptocurrency, EstCoin claiming that the country must follow the EU’s monetary system.
Libra has faced backlash from different sections of monetary regulators after its unveiling a plan to reach over 1.7 Billion people. The US legislators is already poised to stop the development of the digital currency.