Portugal is worried about Facebook’s new currency

  • ECO News
  • 11 October 2019

Portugal's assistant secretary of state and finance admits that the Facebook Libra has some risks that need to be taken into account.

Libra is the new cryptocurrency that Facebook wants to create in the near future, but this new product entails systemic risks for the financial system, and not only that, admits the Portuguese Secretary of State for Finance, Ricardo Mourinho Félix, who said that Portugal also has concerns about the project of the company led by Mark Zuckerberg.

“Portugal has the same concerns of other European countries about the Libra and awaits the recommendations of the G7 working group on stable currencies, which should be known in the coming days,” he said at the closing of the meeting of central banks of Portuguese-speaking countries, organized by Bank of Portugal.

According to Mourinho Félix, “the pound may be the first private currency to impose itself”, but we must take into account the “high risks with a systemic dimension associated with it”.

“The fact that the Libra can limit the scope of traditional monetary policy tools, especially a stable currency, has the potential to impose itself more quickly in economies with high inflation rates, weaker institutions, and an even smaller financial sector,” he added.

For this reason, he argued, “it is essential that no stable currency project begins to operate until all concerns are addressed.