‘Scrutiny needed’ in Bitcoin market

Companies promoting the crypto-currency Bitcoin have been advised to avoid playing cat and mouse with regulators.

As fears subside about the use of digital cash in the black market, money laundering and hacking, a senior official at the Central Bank of Ireland urged big players in the payments world to open it to scrutiny.

The call was made at a major conference in Dublin where the future of the currency was debated.

Gareth Murphy, director of markets supervision with the regulator, said bespoke rules will have to be developed for digital money.

“Unlike the previous financial crisis when a culture of indifference by parts of the financial services industry towards regulation prevailed, I would urge this industry to work actively to address the concerns of financial authorities rather than ’playing cat and mouse’ and eventually, and inevitably, being drawn into the regulatory net,” Mr Murphy said.

Bitcoin has been much-maligned for its association with the online drugs market, most notably the now defunct Silk Road, and fears that hackers will be able to target holders of the currency.

It is also volatile, with its value 18 months ago just €10 and increasing to more than €812 late last year. It now trades at €443.

But now it is gaining credence as a viable alternative for the costly wire transfers of an estimated €440bn in remittances to families in the developing world.