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Bitcoin sinks over 10% as Powell calls for halt to Facebook’s Libra project

The Fed chairman said on Wednesday that the new cryptocurrency presented "serious concerns" around privacy, consumer protection and money laundering

Libra logo
Facebook is planning to launch Libra to the general public next year

The price of original cryptocurrency Bitcoin fell more than 10% on Thursday after Federal Reserve chairman Jerome Powell called for an immediate halt to the launch of Facebook Inc’s (NASDAQ:FB) Libra cryptocurrency.

Speaking to the Financial Services Committee of the US’s House of Representatives on Wednesday, Powell said that Libra, which alongside Facebook also counts payments giant Visa Inc (NYSE:V) and taxi app Uber Technologies Inc (NYSE:UBER) among its backers, raised “serious concerns” around privacy, consumer protection and money laundering as well as more general financial stability.

READ: Facebook unveils new Libra cryptocurrency

Until these concerns were addressed, Powell said he did not think the project should proceed.

The comments sent a bit of a chill through the crypto trading desks, with Bitcoin having dropped 11.9% to US$11,470 at lunchtime.

Craig Erlam, senior market analyst at OANDA, said that while the comments were “good news” as the Fed taking a “serious, thorough and long-term approach” to the crypto space was ultimately a positive, it wasn’t what traders had wanted to hear, especially after a “good run” of price gains.

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