Facebook’s upcoming cryptocurrency venture, Libra, has yet again faced a new roadblock after a high-ranking official at the European Central Bank said on Monday that the plan of the tech giant to release the digital money is problematic, calling it “treacherous.”
“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 member of the ECB’s executive board.
Mersch slammed Facebook’s data handling reputation saying that people should not trust “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.” The ECB official made the statements during a speech in Frankfurt on Monday.
Furthermore, the official also called out the carter-like behavior of the Libra Association, a group of companies that is responsible on the operation of Facebook’s new digital currency, including the control of the blockchain technology behind Libra. Libra Association members include Mastercard MA, +0.00%, PayPal PYPL, -0.15%, eBay EBAY, -0.25% and Uber UBER, -0.58%.
“With such a setup, it is difficult to discern the foundational promises of decentralization and disintermediation normally associated with cryptocurrencies and other digital currencies. 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,” he said.
This is not the first time that the cryptocurrency venture has been slammed by regulatory roadblocks. In the United States, both Republicans and Democrats lawmakers have urged the tech giant to halt the release of Libra, citing the different implications of the cryptocurrency to the economy and the stability of the global financial system.