Portugal is the latest country to join the chorus of regulators and leaders alike expressing concern about Facebook’s proposed cryptocurrency, Libra.
Reuters is reporting that Ricardo Mourinho Felix, Portugal’s secretary of state for finance, said that Libra shouldn’t be released into general circulation until all of the potential risks it poses are mitigated.
“It is clear from the outset that it is a high-risk phenomenon with systemic implications,” Felix said. “It is essential that no ‘stable currency’ project — like Libra — is launched until all concerns have been duly addressed.”
Earlier this week, the European Union (EU) said it would introduce legislation to govern new cryptocurrencies like Libra, saying such digital currencies posed a threat to the financial system as a whole.
Felix shared the sentiments of other countries that have expressed trepidation around Libra.
Felix highlighted the “risk that Libra could limit the reach of traditional monetary policy tools,” and “could have a significant effect on the policies which today promote the stability of the financial system.”
Recently, Democratic senators Sherrod Brown of Ohio and Brian Schatz of Hawaii wrote letters to Visa, Mastercard and Stripe asking that the firms rethink their membership in Facebook’s Libra Association.
The senators said that Libra is a risk to the payments business and to global financial networks. The legislators pointed to news articles that indicate Libra’s lack of transparency.
Banking Committee member Brown and panel member Schatz told Bloomberg their letter indicated that “Congress, financial regulators, and potential Libra Association member companies have struggled to get sufficient details from Facebook about risks that Libra may pose, including facilitating criminal and terrorist financing, destabilizing the global financial system, interfering with monetary policy, or exposing consumers to risks currently limited to accredited investors.”
PayPal left the Libra Association on Oct. 4. The association is now comprised of 27 member firms, including Uber and Coinbase.