Bitcoin slumped more than 10% over the weekend to a two-week low as fears of a crackdown of cryptocurrencies grew on mounting scrutiny of Facebook’s planned Libra digital coin.
Bitcoin fell 11.1% from Friday to $9,855 early on Monday, its lowest since July 2. The original cryptocurrency slumped 10.4% on Sunday alone, its second-biggest daily drop this year. It was last up 1.3% at $10,319.
Politicians and financial regulators across the world have called for close scrutiny of Facebook’s Libra coin, with concerns ranging from consumer protection and privacy to its potential systemic risks given the social media giant’s global reach.
In a sign of widening U.S. attention, a proposal to prevent big technology companies from functioning as financial institutions or issuing digital currencies has been circulated for discussion by Democratic lawmakers, according to a copy of the draft legislation seen by Reuters.
U.S. President Donald Trump had last week criticized bitcoin, Libra and other cryptocurrencies, demanding that firms seek a banking charter and subject themselves to U.S. and global regulations if they wanted to “become a bank”.
Bitcoin, which initially shrugged off Trump’s Tweet, fell sharply after U.S. Federal Reserve Chairman Jerome Powell called for a halt to Facebook’s project until concerns from privacy to money-laundering were addressed.
“Together they have increased the tail risk that the U.S. will look to crack down on it in some way,” said Jamie Farquhar, portfolio manager at crypto firm NKB Group in London.
Underscoring the growing attention on Facebook’s plans, Japanese authorities have also set up a working group to look at Libra’s possible impact on monetary policy and financial regulation, government sources told Reuters.
European Central Bank policymaker Benoit Coeure is due to deliver a preliminary report on the matter at a meeting of G7 finance ministers this week in Chantilly, north of Paris.
Bitcoin climbed nearly 55% in nine days after Facebook unveiled its plans for Libra on June 18, touching an 18-month high of nearly $14,000. The project has boosted hopes among some investors that cryptocurrencies could gain wider acceptance.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Dean Popplewell
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.
Latest posts by Dean Popplewell (see all)
- Euro zone bond yields sink as German manufacturing slows - 24 July 2019
- How Boris Johnson Plans to Deliver Brexit in 100 Days - 24 July 2019
- Weak PMI’s Sink EUR - 24 July 2019