Bitcoin Price Plunges Following Fed Chair Powell’s Anti-Crypto Comments

Speaking at a forum in Switzerland, Powell was asked about cryptocurrencies and Facebook’s Libra stablecoin. More specifically, someone asked if central banks are “missing out on the challenges but also the opportunities represented by digital currencies,” reports Yahoo Finance. “I don’t think so,” responds Powell.

Highlight: “We are following the whole question of digital currencies,” says Fed Chair Jerome Powell. “It’s not something that we are actively considering. For us, it raises significant issues that we would want to see resolved.”https://t.co/xpAujlCWBd pic.twitter.com/n5M5XDU5AZ

— Yahoo Finance (@YahooFinance) September 6, 2019

Shortly after his comments, Bitcoin’s price dropped nearly $400 from around $10,850 to $10,450. Some attributed this to Bakkt announcing that its Warehouse custody is now live, though it very well may be a combination of both events. The Chairman continues, stating that, of course, the central bank is following digital assets, but it’s not something they are “actively considering.” His reasoning is that these assets raise “significant issues” that need resolution before they would get involved themselves. Related: Looking to buy and sell Bitcoin? Check out our guide on the best cryptocurrency exchanges for trading Bitcoins. Cybersecurity is a big problem, Powell claims, not only for a United States currency but for a “multi-national currency” as well. However, it seems the Chairman isn’t fully aware of how cryptocurrencies and blockchain work. “It’s one thing to be able to counterfeit paper currencies. It’s another thing to be able to hack into a cyber-currency and create, with a computer, however much of it you want.” These issues are “quite daunting,” he finishes. However, Powell does say he doesn’t want it to seem like they’re ruling cryptocurrencies out. It’s just that there are a ton of different payment solutions for customers who don’t really seem like they’re “clambering” for decentralized digital assets. Essentially, he sees the issue as non-important for now. On the topic of Libra, specifically, Powell changes his tune a little. Due to Facebook’s massive userbase, the Chairman claims that Libra could be “systematically important very quickly.” That said, as many have claimed before, the stablecoin but adhere to “the highest regulatory and supervisory expectations.” What do you think about central banks creating a cryptocurrency? Did Powell’s comments directly contribute to Bitcoin’s price drop? Let us know your thoughts in the comments below. 

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