The Danish National Bank released a publication yesterday, where they explain why they do not believe that Bitcoins are money as well as talk about the risks of its volatile nature. The publication, which you can read here, starts out by saying:

“Bitcoins are not money in a proper sense as there is no issuer behind them. Instead, bitcoins display the characteristics of a commodity to which users attach value. Unlike precious metals such as gold and silver, bitcoins have no actual utility value, bearing closer resemblance to glass beads.”

This shows that the Danish National Bank has not understood the whole concept of how cryptocurrencies work and basically try to dismiss it as being nothing but simple glass beads. They also seem to not consider the fact that money today is no longer based on anything but faith, unlike previously where money were based on the amount of gold a country had.

“Bitcoin is a virtual currency without any value anchor and hence it may rise sharply or fall very suddenly. A core property of money is that its value is stable so that its purchasing power does not change markedly from day to day,” says Governor Hugo Frey Jensen from Denmark’s National Bank and continues:

“In spite of the considerable focus, use of bitcoins as a means of payment remains very limited. Against that background, the risks linked to their use are currently assessed to be limited to the individual user,” says Hugo Frey Jensen, adding: “The European authorities are analysing the need to regulate such virtual currencies.”