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- BoJ Governor joins major central bankers in the crypto debate.
- Governor Kuroda points out the trending speculative trade and “extraordinarily high” volatility.
- Kuroda sees potential in stablecoins in becoming “a suitable trading alternative” soon.
Bitcoin’s recent over the top volatility, both surge and slide, has worried many investors. A recent interview revealed, the Bank of Japan Governor, who already considered Bitcoin (BTC) ‘too unreliable a currency,’ decidedly agrees with the crypto questioning crowd.
Speculative Trade & Extraordinarily High Volatility
Haruhiko Kuroda, the governor of Bank of Japan (BoJ), believes “most of the trading is speculative,” that too, with an “extraordinarily high” volatility. Adding that it is “barely” used for “settlements.” In the past few weeks, the coin has undergone some severe fluctuations. For instance, last week began with a 16% value surge on Monday and closed at 18% down on Sunday, tracing a chain of unruly shifts.
While Bitcoin wasn’t the only token to show such patterns, being the apex cryptocurrency meant it was the one scrutinized and criticized the most.
BoJ’s Kuroda Joins The Crypto Debate
Since Bitcoin’s future has been up for debate for a very long time, Governor Kuroda wasn’t the first to raise such concerns. In April, Federal Reserve Chair Jerome Powell called digital currencies “vehicles for speculation.” Early May witnessed Andrew Bailey, the Bank of England governor, issuing several warnings, stating cryptocurrencies “have no intrinsic value” and the investors investing “should be prepared to lose all their money.” More recently, the European Central Bank Vice President Luis de Guindos said that these assets have “very weak fundamentals and – subject to a lot of volatility,” and so can’t be considered as “real investments.”
On the other hand, despite volatility, Bitcoin gained almost 30% in value this year. And if this trend continues, investors will likely keep investing in cryptocurrencies, stated Ray Dalio, Founder, Bridgewater Associates.
Bitcoin: Not A Suitable Trading Alternative
Compared to Bitcoin, Kuroda sees more potential in stablecoins in becoming “a suitable trading alternative” in the near future. With values backed by assets, stablecoins even meet regulatory governance codes and legal standards. Moreover, BoJ’s upcoming monetary policies will also take into account climate change. Governments worldwide, including China, Japan, and the US, have pledged to reduce greenhouse emissions to the best of their capabilities and this means a big ‘no’ for Bitcoin. At least, not until it switches from its Proof of Work network.
Governments & Central Banks Says No To Crypto
Governor Kuroda’s statements mirror most other national banks. Recently, the regular, over 6-hours a day countrywide power outages led to an outright ban on crypto mining in Iran. And the stricter crypto mining and trading policies saw an abrupt suspension of crypto conducts in China. Last week, the Bank of Korea recognized cryptocurrency trade as a “potential threat” to their national financial system.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
