Japan to act on Bitcoin mess

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TOKYO: Japan’s finance minister said on Friday he always thought Bitcoin was suspect and said the country might take action following the apparent collapse of a Tokyo-based exchange for the virtual currency.

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Taro Aso’s comments came after chief US central banker Janet Yellen said the US Federal Reserve had no powers to control the unit, which she said would be very difficult to regulate.

Aso, who also serves as deputy prime minister, said he had foreseen difficulties for the crypto-currency, which is generated by complex chains of interaction among a huge network of computers around the planet.

“I was thinking that this sort of thing won’t last long,” said Aso, 73, adding that, “I was thinking it would collapse sometime.”

“Japan is overwhelmingly advanced in this field. In this sense, I was thinking since before that we might face a situation where Japan has to act, but I’d say it came earlier than I thought,” he further said.

The global Bitcoin community has been shaken this week by claims that hundreds of millions of dollars’ worth of the unit     have been syphoned from the digital vaults of the Tokyo-based Mt.Gox exchange.

Withdrawals were frozen earlier this month because of what the firm said was a bug in the software underpinning Bitcoin that allowed hackers to pilfer them.

Supporters rallied round, insisting that the Bitcoin itself is sound and the problems lay with Mt.Gox, which they said was badly managed and unable to cope with the burgeoning popularity of the young currency.

Aso said on Friday that police and government ministries would work together to address the issues raised by the Mt.Gox episode.

“We will hurriedly work it  out,” he said, adding that, “It is not a currency that all the  people recognize.”

His comments come after Yellen told a Senate hearing that banks under the Fed’s regulatory purview were not involved with Bitcoin, and so it had no powers in the matter.

No authority
“This is a payment innovation that is taking place entirely outside of the banking industry,” Yellen said.

“The Fed doesn’t have authority with respect to Bitcoin,” she said.

Yellen pointed to other US regulators, including the Treasury, watching the Bitcoin sector for potential money laundering and other criminal uses of the digital currency.
AFP

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