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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

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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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