"Bitcoin isn't a currency"

Jan Smets, the governor of Belgium's central bank, has issued a warning with regard to the cyber currency bitcoin. Mr Smets says that people should take heed: "Investing in bitcoin can lead to big losses". The central banker believes that bitcoin has the potential to encroach upon global financial stability.

Mr Smets told VRT: "Let's stop calling bitcoin a currency. In contrast with the euro bitcoin is not guaranteed as a means of payment by any central bank or any other authority."

Belgium's central bank is monitoring the evolution of bitcoin because of the potential impact on financial stability, though Jan Smets insists that at the minute the risk is small.

The central banker adds that the spending power of bitcoin isn't guaranteed, unlike with the euro where the European Central Bank guarantees price stability. He also points to the evolution of the value of bitcoin that was worth less than 1,000 US dollars at the beginning of the year and has risen to 20,000 dollars before falling back to 12,000.

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