Central Bank of Cyprus says Bitcoin is dangerous. Really?

Mostly, I don’t really care what Central Bank of Cyprus  (CBC)thinks.  But sometimes, even I have to raise an eyebrow and say “Really?”.  So happened once again today, when I read this bit in Cyprus Mail:

The Central Bank (CBC) has said use of virtual currency bitcoin is extremely dangerous, the Cyprus News Agency (CNA) said on Tuesday.

“Using any virtual money is extremely dangerous because they are not monitored by any authority, thus operating without control,” CNA said, quoting the CBC.

I can understand the dangers coming from the digital nature of Bitcoin – hackers getting control of your money, or breaking into your servers for some extra mining power.  But saying that it’s dangerous because it is not controlled by the government? That’s a bit too far.  Especially considering this year’s banking crisis in Cyprus.

In fact, if you look around for a second opinion, the Bank of America recently said that with the new Bitcoin dedicated servers, Bitcoin will be a serious competitor to cash.  The article on Inc.com lists possibility of government regulation as one of the disadvantages to the new currency:

The risk of government regulation.

Bank of America says it is unlikely that the government will promote a new currency, especially one as suspect as Bitcoin. As the U.S. government is trying to figure out where Bitcoin fits into its tax and payment system, regulation of any kind would increase its transaction costs–offsetting one of its major benefits.