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(LEAD) BOK head remains doubtful about Bitcoin as non-legal currency

2013/12/12 16:12

SEOUL, Dec. 12 (Yonhap) -- South Korea's top central banker on Thursday expressed doubts about the possibility that Bitcoin, virtual money, could develop into non-legal tender.

Bitcoin was invented in the aftermath of the global financial crisis by pseudonymous computer developer Satoshi Nakamoto.

Bitcoin, which can be exchanged online via a peer-to-peer payment network, has recently received the spotlight after Federal Reserve Chairman Ben Bernanke said it may hold long-term promise as a possible means of exchange in the future.

Bank of Korea (BOK) Gov. Kim Choong-soo told a press conference that it is hard to talk about the future of Bitcoin, but given its limited acceptability, it may be difficult for Bitcoin to develop into non-legal tender.

He also said that it is questionable to see Bitcoin as currency due to its high volatility.

The BOK is preparing to write a report on whether Bitcoin can become a means of payment and settlement, but it largely remains negative about such a possibility.

The value of Bitcoin has undergone high fluctuations recently in tandem with assessments on the virtual money made by central banks around the globe.

France's central bank has warned against the use of Bitcoin, saying that its value is highly volatile and that the virtual money is not regulated by authorities. China has also banned financial institutions from trading Bitcoin as the computer-generated money carries risks.

The Korean government, the central bank and the financial watchdog have said they would closely monitor possible money laundering and violations of real name transactions using Bitcoin since it is not seen as meeting the criteria of legitimate financial products.

A Paris Baguette bakery in Incheon, west of Seoul, became the first off-line business to accept Bitcoin in South Korea earlier this month.

sooyeon@yna.co.kr

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