On Tuesday, the head of Japan’s Central Bank, Haruhiko Kuroda, stated that in order for Bitcoin to have a future as a currency, the virtual currency must prove that it can be a stable and reliable medium of exchange in the aftermath of recent scandals and constant price fluctuations.
In the wake of such widely-reported scandals as the implosion of the Tokyo-based exchange, Mt Gox, which resulted in a loss of almost 600,000 million US dollars’ worth of bitcoins with the company’s operators now facing legal action all over the world, Kuroda’s doubts are certainly justifiable.
Bitcoin is not backed by any government or a central bank, which has resulted in negative responses from government officials which have ranged from skepticism to calls for an outright ban.
Kuroda went on to say: “It is not a currency, and I don’t think it is a general means of settlement. Without safety or stability in its value, there would be no demand. In that sense, it cannot be a currency.”
Mt Gox was one of the most trusted exchanges for Bitcoin transactions prior to its collapse. This has led to doubts as to the reliability of other major exchanges and even whether the digital currency will survive.
Agree to disagree
Kuroda’s comments, however, are at odds with recent developments, especially in countries like Australia and the US.
On April 8, a Bitcoin ATM presentation was held on Capitol Hill in Washington DC where Congressman Jared Polis (D-CO) became the first known representative to buy Bitcoin. Then, US congressman Steve Stockman (R-TX) filed a bill proposing that Bitcoin should be “treated as currency for federal tax purposes”.
Furthermore, St. Louis Federal Economist, David Andolfatto, stated: “Bitcoin could be a good threat to central banks,” in an interview with Business Insider.
The state of Texas announced yesterday that while it will not regulate digital currencies as money, Texans will be able to use them to buy and sell goods and services free of regulation.
Meanwhile, Bitcoin ATMs have been springing up around the world along with new methods to facilitate Bitcoin transactions and with an increasing number of businesses opting to gain a competitive edge by starting to accept Bitcoin from Australia to France among many other countries.