Governor of the Bank of Japan Haruhiko Kuroda has cast doubts on bitcoin's future as a currency.
"Without safety or stability in its value, there would be no demand. In that sense, it cannot be a currency," he told reporters after a central bank policy meeting.
The central bank chief's mention of stability also indicates that the perceived volatility of bitcoin is an issue of concern.
Mt. Gox shock
When the oldest and biggest bitcoin exchange of them all, Mt. Gox imploded in spectacular fashion in late February, citing the loss by theft of 750,000 of its customers’ bitcoins, it took the nation by surprise.
The institutions of government had seemingly little knowledge of bitcoin and how to deal with the bitcoin business that had brought such unwelcome attention to the country's capital.
Further, consideration caused Japan’s senior regulators to call for international regulation on bitcoin, with the Senior Vice Finance Minister Jiro Aichi stating: “If we regulate [bitcoin], international collaboration would be necessary” to prevent criminals from exploiting loopholes or weak points in international law.
Later, perhaps feeling the pressure of the international media spotlight over Mt. Gox, the country's ruling party, the Liberal Democratic Party (LDP) – while saying that bitcoin was not a currency – launched an investigative committee into bitcoin, and blocked banks from “brokering bitcoin transactions or opening accounts holding the virtual unit”.
The latest comments from the Bank of Japan head seem a more considered response, although not entirely positive for bitcoin as a whole.
Haruhiko Kuroda image via Wikipedia / Akira Kouchiyama
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