Japan's central bank chief says surge in bitcoin prices "abnormal"

BY  | FROM  | 2017-12-22 18:37

Japan's central bank chief Haruhiko Kuroda said Thursday that the recent surge in the price of bitcoin is "abnormal."

The Bank of Japan Governor made the remarks at a press conference following the central bank's two-day policy meeting.

In Japan, the price of the bitcoin topped 2 million yen (17,640 U.S. dollars) earlier this month on a major exchange, registering a 20-fold jump since January when it changed hands around 100,000 yen (882 U.S. dollars).

"It's not my place to say, but if you look at the charts, it's clear that the jump (in prices) is abnormal," Kuroda reportedly said.

He also said that bitcoin, unlike conventional currencies, is not controlled by a central bank or government and "does not have the same function as currency as a means of payment or settlement."

Bitcoin is "being traded for investment or speculative purposes," he said.

Bitcoin is a major digital currency without ties to any bank or government. It is underpinned by blockchain technology, a digital ledger system that uses cryptography.

Credibility of the virtual currency has been a concern to many people, especially after the sudden shutdown in 2014 of the Japanese bitcoin exchange MtGox Co..

The virtual currency has also raised controversy over its potential use for money laundering and capital flight, as it allows users to spend and transfer money anonymously.

Police said last month that 170 cases of suspected money laundering linked to cryptocurrency included bitcoin were reported in Japan from April through September.

Japan revised its law last year to regulate the dealings of virtual currencies including bitcoin, so as to prevent their use in terrorism or money laundering and protect the interests of the owners.

According to the revised law, virtual currencies could be used for settlement. But exchanges dealing virtual currencies shall be registered with the Financial Services Agency.

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