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FLASH: Fed Chairman’s comments on Libra hammers Bitcoin price
Wednesday, Fed Chairman Powell said that Facebook’s (NASDAQ:FB) plan to build a digital currency called Libra “cannot go forward” until serious concerns are addressed, comments that pressured the project and hammered the price of Bitcoin (BTC).
The strong comments from the most powerful US financial regulator underscored the growing regulatory hurdles facing the proposed cryptocurrency, which has drawn scrutiny from policymakers globally.
“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Mr. Powell said during his semi-annual testimony on monetary policy before the House of Representatives Financial Services Committee.
“I do not think the project can go forward” without addressing those concerns, he added later.
Mr. Powell said any regulatory review of the project should be “patient and careful.” He noted that existing rules do not fit digital currencies.
“It is something that does not fit neatly or easily within our regulatory scheme but it does have potentially systemic scale. It needs a careful look, so I strongly believe we all need to be taking our time with this.”
“We are very much aligned with the Chairman around the need for public discourse on this,” a Facebook spokeswoman said in an e-Mail. “This is why we along with the 27 other Founding Members of the Libra Association made this announcement so far in advance, so that we could engage in constructive discourse on this and get feedback.”
Mr. Powell’s comments about Libra dented the price of Bitcoin, which fell as much as 8% during his testimony.
Currently Bitcoin is trading at: 11,747.66-819.28 (-6.52%),as of 10:32p BST, the market is open