Bank of Japan chief doubts Bitcoin’s future as a currency

TOKYO: 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 currency 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 central bank 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 “electronic records” 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 memory stick, 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. —PTI