Bitcoin tumbles to 5-month low as Libra hit by United States backlash

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Facebook head Mark Zuckerberg.

Zuckerberg made the comments as he faced a torrent of criticism at a congressional hearing over the planned cryptocurrency it is seeking to roll out next year.

The company seems to spark public and official anger at every turn these days, from its shift into messaging services that allow encrypted conversations to its alleged anticompetitive behavior to its refusal to take down phony political ads or doctored videos.

The Libra project has been the subject of enormous scrutiny since its announcement in June, and critics have suggested it could enable money laundering and terrorist financing, and empower companies to abuse users' transactional data.

Eight of the 28 founding members of the Libra Association - set up to independently govern the currency - have pulled out of the project.

Zuckerberg, meanwhile, is pushing an optimistic vision of Libra and what it could mean for people around the world who don't have access to bank accounts.

In an extraordinary statement Facebook's founder outlined to Congress the conditions under which the company would extricate itself from the Libra Association if the digital currency runs the risk of becoming illegal or outlawed in the United States. But Zuckerberg said he views the U.S. financial system as "outdated", and China, he constantly reminded Congress, is working on its own public-private digital currency partnership with payment processor Alipay, which boasts 900 million users.

But in a first today, Zuckerberg said that Facebook would abandon the project if it didn't receive approval from "all" regulators.

Several high-profile companies that had signed on as partners in Facebook's governing association for Libra have recently bailed, spelling a potentially rough road for the project. Should that plan change, and the Libra Association decides to press ahead without USA approval, then Facebook would leave the Libra Association: "We are not going to launch anything until [Libra] gets approval".

During a tense exchange, Ocasio-Cortez pushed Zuckerberg about Facebook's decision to not fact-check political ads, which essentially gives politicians nearly total control of the content they post online.

"While officially tomorrow's hearing is about the cryptocurrency initiative Libra for Facebook, we fully expect politicians to use this forum as another major shot across the bow on broader antitrust concerns", they added.

The world's largest cryptocurrency dropped as much as 10 per cent to US$7,305 in NY, the lowest level since May. Speaking to Yahoo Finance, Marcus insisted that Libra was "absolutely not" in jeopardy, while admitting that the project is "going to get harder before it gets easier".

The Facebook CEO also has cited competition from China as a compelling reason against breaking up the company.

Sen. Elizabeth Warren, a leading critic of Facebook, posted a deliberately false ad on the social network earlier this month to prove the dangers of the current system.

In the wake of these departures, Facebook's Libra chief David Marcus was forced to defend the project's feasibility in a series of media interviews last week.

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