BoJ chief doubts Bitcoin's future as a currency

A man walks past the bitcoin firm Neo&Bee offices on April 3, 2014 in the Cypriot capital Nicosia
A man walks past the bitcoin firm Neo&Bee offices on April 3, 2014 in the Cypriot capital Nicosia

The head of the Bank of Japan on Tuesday cast doubt on Bitcoin's future, saying the scandal-plagued digital unit "cannot be a currency" unless it proves its reliability.

The computer-generated has suffered a series of blows since February when the Tokyo-based Bitcoin trading exchange MtGox filed for bankruptcy, after admitting it had lost about half a billion dollars of the virtual unit.

Unlike most currencies, Bitcoin is not backed by a government or central bank.

"It is not a currency, and I don't think it is a general means of settlement," BoJ Governor Haruhiko Kuroda told reporters after the wrapped up its latest policy meeting.

"Without safety or stability in its value, there would be no demand. In that sense, it cannot be a currency."

On Friday, reports said the boss of a Bitcoin company in Cyprus had fled abroad days after it suddenly stopped operations.

That came after MtGox said last month it had submitted "" and other documents to the Tokyo police as questions swirl over missing customer funds.

The exchange initially said it had lost 850,000 coins, worth nearly $500 million at the time.

It later said it found 200,000 of them in a "cold wallet"—a storage device, such as a , that is not connected to other computers.

MtGox, which at one time reportedly processed 80 percent of global Bitcoin transactions, froze withdrawals in early February because of what the firm said was a bug in the software underpinning Bitcoin, allowing hackers to steal them.


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© 2014 AFP

Citation: BoJ chief doubts Bitcoin's future as a currency (2014, April 8) retrieved 14 October 2019 from https://phys.org/news/2014-04-boj-chief-bitcoin-future-currency.html
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