Australia’s central bank chief Philip Lowe is the latest dignitary to raise the alarm on Bitcoin. Lowe said that the current fascination with the crypto currency feels more like a speculative mania and in all likelihood it poses a grave threat to appeal to criminals than consumers.
In a speech in Sydney, the Reserve Bank of Australia Governor slammed Bitcoin, pointing out the downsides of digital currencies. Rather than an instrument of everyday transactions or a convenient form of electronic payment, it seems to favor those who make deals in the black or operate in the illegal economy, said Lowe.
Bitcoin has soared more than 18-fold since the start of the year, reaching an all-time high of $18,353 on December 8, 2017. With the rally, people have rushed to invest in the crypto market with the hope that it will become an alternative to traditional currency or gold.
Earlier, his New Zealand counterpart Grant Spencer had voiced concern over the Bitcoin’s incredible gains, calling the rise of digital currency “remarkably like a bubble.”
Also Read: Bitcoin: What's ahead for 2018?
Lowe added that the crypto currencies are not used for everyday transactions as of now, and it is unlikely to change in the near future. He also commented on the high volatility, a low number of transactions and governance problems related to the digital currency. Lowe was of the opinion that the cost of transactions of Bitcoin is on the higher side, another reason to rule out the possibility of a digital form of the Australian dollar. Lowe said that until technologically is feasible, there can’t be an addition of an electronic form of Australian banknotes, although he also confirmed that the RBA is in close contact with its peers in other countries and are looking at the electronic banknotes viability.
Korean prime minister is another who recently warned that crypto currencies are a gateway to illegal activities. The Korean authorities have reportedly held an unscheduled meeting on crypto currencies to look at the potential downsides.
Korea is one of the biggest hubs of crypto market. According to Coinmarketcap website, South Korean exchange Bithumb has the highest daily volume in the world with over $2 billion being traded every day. Earlier this month, the crypto currency was traded at a premium of more than 20 percent against prevailing international rates on the Korean exchanges.