(Bloomberg) – Bank of Japan Governor Haruhiko Kuroda has joined the group of central bankers theorizing about bitcoin after its latest rise and fall.
“Most of the trading is speculative and volatility is extraordinarily high,” Kuroda said in an interview. “It is hardly used as a means of payment.”
His statements echoed similar comments from his peers. US Federal Reserve Chairman Jerome Powell said in April that cryptocurrencies are simply vehicles for speculation. Likewise, the vice president of the European Central Bank, Luis de Guindos, pointed out that the tokens should not be considered real investments.
Bank of England Governor Andrew Bailey has made several forays into the debate this month, warning that cryptocurrencies have no intrinsic value and that people should only buy them if they are prepared to lose their money.
Bitcoin has been on a roller coaster ride in recent months. Prices rose 16% on Monday after plummeting to 18% on Sunday, to continue a series of radical swings experienced by various cryptocurrencies.
The token took a hit after China’s State Council reiterated its call to restrict mining and trading. Earlier liquidations were driven by former supporter Elon Musk, who took a 180-degree turn and criticized bitcoin for its energy consumption while mining. The extreme volatility caused by one man’s tweets has added to the image of instability.
Kuroda differentiated cryptocurrency from stablecoins that have assets that support their value. Stablecoins must also meet healthy legal standards and governance codes in order to become a convenient form of payment in the future, he added.
However, volatility aside, bitcoin has still posted gains of around 30% so far this year. Ray Dalio, founder of Bridgewater Associates, said that if cryptocurrencies continue to gain traction, investors might prefer to invest in them over sovereign bonds.
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Original Note: Kuroda Joins Chorus of Central Bankers Casting Doubt on Bitcoin
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