Bank of Japan Governor Haruhiko Kuroda joined the chorus of central bankers chiming in on Bitcoin following its latest surge and slide.
“Most of the trading is speculative and volatility is extraordinarily high,” Kuroda said in an interview Thursday. “It’s barely used as a means of settlement.”
His remarks resonated with similar comments by his peers. Federal Reserve Chair Jerome Powell said in April that cryptocurrencies are simply vehicles for speculation. Likewise, European Central Bank Vice President Luis de Guindos says the tokens shouldn’t be seen as real investments.
Bank of England Governor Andrew Bailey has made several forays into the debate this month, warning cryptocurrencies have no intrinsic value and that people should only buy them if they’re prepared to lose their money.
Bitcoin has been on a roller-coaster ride in recent months. Prices surged 16% Monday after plunging up to 18% on Sunday to continue a series of wild swings experienced by a range of cryptocurrencies.
The token was buffeted after China’s State Council reiterated its call to curtail mining and trading. Earlier sell-offs were spurred by onetime proponent Elon Musk, who did an about-face and criticized Bitcoin over energy usage during mining. The extreme volatility caused by one man’s tweets has added to the picture of instability.
Kuroda differentiated the cryptocurrency from stable coins that have assets to back up their value. Stable coins must also meet legal standards and healthy governance codes, so they could become a convenient way of payment in the future, he added.
Still, volatility aside, Bitcoin has still clocked up around 30% gains year to date. Ray Dalio, founder of Bridgewater Associates, said that should cryptocurrencies continue to gain traction, investors might decide to invest in them rather than government bonds.
— With assistance by Michael Heath