[Asia Round-up] It pays to be cautious about digital cash

(Photo : Xinhua/NEWSis)

The collapse of the bitcoin exchange MtGox tells a lot about both entrepreneurs and cyber buyers. Some US$450 million is said to have been lost from the debacle. The vision of inflation-less currency that can move easily and without cost between sender and receiver is an attractive one. But, one should not get carried away by it. Some tough questions need to be asked. Are operators of any currency or payment scheme trustworthy and accountable to users? It would be reckless to convert large sums of money into digital cash. Bitcoin is not underwritten by a central bank or a sovereign state. It has no monetary value except that ascribed to it by an anonymous group of currency owners. There is the danger of hacking, which is what brought MtGox down. An associated danger is that these currencies could be used for money-laundering and terrorism. Caution is to be used in order to ensure that investments in digital cash are not rendered worthless either by fraud or ineptitude.
The Straits Times, Singapore