Cryptocurrencies drop as Fed Powell cites Facebook’s Libra concerns

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Cryptocurrencies, led by the Bitcoin, fell sharply on Thursday after the Fed Chair Jerome Powell raised concerns about the new Libra digital currency announced by the Facebook.

During his Congressional testimony on Wednesday, Powell said the Libra currency raises “serious concerns” regarding privacy, money laundering, consumer protection and financial stability.

The Bitcoin currency which had scored the highest level in 17 months above 13,000 dollars just two weeks ago, slipped 11.62 percent at $11,495.

The price of the largest electronic currency in terms of market value dropped by about $2,000 dollars in the last 24 hours after it hit a peak of $13,200 on BitStamp exchange on Wednesday.

Meanwhile, Ethereum the second largest cryptocurrency in terms of market value, slumped 11.88 percent to $271, Ripple decreased 15.68 percent, registering $0.33 and the Bitcoin Cash recoiled 18.09 percent to $341.  

Facebook Libra raised a host of “serious concerns” around “money laundering, consumer protection and financial stability,” Powel said. “I just think it cannot go forward without there being broad satisfaction with the way the company has addressed money laundering.”

Mr. Powell was not the first governor of the central bank to express his suspicions about libra announced by Facebook last month. Central bankers in Britain, France, the European Central Bank, Singapore, and China have also expressed their concerns.

In separate occasions a week ago, five senior Democrats in the Financial Services Commission wrote a letter to the social network calling for "the immediate cessation of implementation plans" for libra until the legislators ' questions were answered.”

What drive concerns about Facebook Libra is that it takes the form of what is known as a stable currency, which are encrypted currencies often pegged to currencies such as the dollar. In the case of Libra, the symbol is supported by a range of government currencies and debt securities.

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