Bitcoin price drops after Federal Reserve lash out to ‘failed’ crypto | Financial

A bitcoin will cost $31,630 after the price drop on Thursday evening. Ethereum also fell 3.5%, while other cryptos showed smaller losses. Bitcoin stood at over $63,000 this year, but lost value after China drastically curtailed its use.

The new crypto or digital currencies have failed to replace the role of the dollar or euro despite their promise, Federal Reserve Chairman Jerome Powell said Thursday.

The only people who use the crypto coins do so mainly to remain anonymous, says Powell, referring, among other things, to criminals who use the coins for money laundering.

Powell also spoke about the so-called stablecoins, cryptocurrencies that are linked to the value of a currency, usually the dollar, yen or euro.

Growth stablecoins

This link prevents them from fluctuating sharply in value like bitcoin. As an investment, these stablecoins can be compared to bank deposits or money funds, according to Fed Chairman Powell, which are “growing incredibly fast” in size.

“It’s very simple, it’s financial activities that need to be regulated,” Powell summed up in the House Financial Services Committee. China again banned a trading platform on Thursday, since last month’s ban from Beijing is said to have shut down around 85% of crypto trade.

More regulation of the entire 13-year-old market is needed soon, Powell said. If laws and regulations are successful, then there is no longer any need to start developing a digital dollar, according to the economist.

The European Central Bank announced further investigations into the digital euro on Wednesday. It could be on the market in five years’ time, as a supplement to existing cash.

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