Bank of Japan Governor Haruhiko Kuroda, head of the nation’s central bank, said on Tuesday that for Bitcoin to have a future, the scandal-plagued digital unit must prove its reliability. With the high-profile scandals involving the crypto-currency – famously when Tokyo-based trading exchange MtGox recently filed for bankruptcy, admitting a loss of about half a billion dollars in bitcoins – Kuroda remains skeptical, saying that Bitcoin “cannot be a currency”.
Bitcoin is not backed by a government or central bank, one of the main reasons Kuroda is doubtful of its future. “It is not a currency, and I don’t think it is a general means of settlement,” Kuroda told reporters at one of the central bank’s policy meetings. “Without safety or stability in its value, there would be no demand. In that sense, it cannot be a currency.” The latest incident in Bitcoin’s troubled times these days came on Friday, when reports of another executive of a Bitcoin company in Cyprus had fled abroad days after it suddenly stopped operations. This has come after MtGox – which used to be one of the most trusted trading companies for Bitcoin globally – spectacularly imploded and is now being investigated by the Tokyo police amid questions of missing customer funds.
MtGox had initially quoted that it had lost 850,000 coins, around US$500 million worth at the time. Recently, it said that it found 200,000 of them in a “cold wallet” – a storage device, much like a memory stick, that was not connected to other computers. MtGox froze withdrawals in early February because the firm had initially found a bug in the software underpinning bitcoin, allowing hackers to withdraw from any account. Then the company’s website went down, creating panic among its clients and investors. The company’s leadership is now under investigation.
[via Business Times]