Bitcoin’s price rose significantly over the past month, thanks largely in part to the announcement of Facebook’s cryptocurrency, Project Libra, which brought public legitimacy to an industry that needed it.
Most companies are on board with the new asset, praising its potential to move the world into a future of digital currencies. However, other parties are more skeptical of what could happen — namely, the United States government.
That’s not to say that the American administration has ever been particularly fond of cryptocurrencies. But, with Libra they’re especially wary, considering Facebook’s userbase and the fact that this could prove to be the asset that makes cryptocurrencies a widely used technology. The most recent to speak out against Libra is Jerome Powell, Chairman of the Federal Reserve. And shortly afterward, Bitcoin’s price fell a hard 12 percent.
Libra: A Concerning Analysis
During a congressional committee this Wednesday, Powell claims that he has “serious concerns” regarding Libra, reports CNBC.
“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability. These are concerns that should be thoroughly and publicly addressed.”
He also claims that Facebook should stop development on the project entirely. That is, until his and other regulators understand the stablecoin a little more.
Within the same meeting, Powell put together a group of experts to take a look at Libra. He’ll have this group find the answers to questions asked by members from the House Financial Services Committee. Each of these questions must be “addressed very thoroughly and carefully, and in a deliberate process” before Libra can move forward, says Powell.
During the same meeting, California representative Brad Sherman criticized the currency. He’s mostly against the project’s ability to “transfer power from the United States government,” which isn’t surprising coming from a member of said government. Sherman believes that this power will then be given to “tax-evaders, terrorists, and drug dealers while reducing the importance of the U.S. dollar as the reserve and trade currency.” A bit of a bold claim, but a notable one nonetheless. “It is time to bring Mark Zuckerberg here,” Sherman concludes.
A Questionable Effect On Bitcoin Price
Regardless of the criticism, it’s hard to say for sure if the congressional meeting broke Bitcoin’s price. Speaking to CNBC by email is one Mati Greenspan, eToro’s senior market analyst. The expert can’t say for sure if traders are paying attention to comments made on Libra by the committee at all. Ethereum and Ripple, number two and three in terms of market cap, fell as well.
“It seems that the market wasn’t ready to break a fresh highs just yet, and (bitcoin) is now back near the low end of its most recent range. This sort of volatility is quite normal for Bitcoin.”
Powell and affiliates will learn more about Libra next week, too. On July 16, the head of Libra’s cryptocurrency wallet development, David Marcus, will testify in front of the committee. Following this on July 17, the House Financial Services Committee will hold a Libra hearing.
Do you think the committee’s comments on Libra affected Bitcoin’s price? Let us know your thoughts in the comments below!
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