ECB Pres: Facebook’s Social Media Data Dominance Mixed With Libra’s Stablecoin Could Create Issues
Christine Lagarde, the newly named European Central Bank’s (ECB) president, said she’s concerned Facebook is going to use its social media platform for promoting the Libra and eliminating any competition.
She expressed this in a letter she sent yesterday in a response to EU lawmakers, a letter in which she highlighted the fact that regulators in the stablecoin market may be worried about competition and that Facebook is unfairly advantaged because it can use its own social media platform in order to promote Libra. Lagarde wrote,
“If the entities that govern stablecoin arrangements control large digital platforms, they could impact the level playing field by promoting the use of their own solutions, with possible lock-in effects, and/or blocking other service providers or payment methods from their platforms.”
Lagarde Thinks Libra Shouldn’t Operate Until Risks Associated with It Have Been Assessed
In the same letter, Christine Lagarde said stablecoins like Libra shouldn’t operate if the regulators haven’t assessed the risks associated with them. She also pinpointed how the term “stablecoin” can be confusing and misleading, as while operators promise the store of their values to be stable, prices still depend on the underlying assets and governance.
Lagarde Was Named the ECB President in October
After being the managing director and chair of the International Monetary Fund (IMF), Lagarde was made the president of ECB. It’s not the first time she has talked about the crypto space, as she previously had discussed how central bankers should issue digital currencies and has also suggested blockchain technology measures for regulators to identify the financial illegal activities happening and the criminals behind them.
According to a Reuters report from last week, she thinks ECB should be prepared for banks to release central bank digital currencies (CBDCs). Steven Mnuchin, the US Treasury Secretary, has earlier this month said he’s okay with Facebook launching a digital currency as long as their currency isn’t used to finance terrorist groups.