VISA's former chief foreign exchange rate trader, Jon Matonis, is tipping a Bitcoin explosion in Australia. Photo: George FreyBitcoin Foundation executive director Jon Matonis says Australia is ripe for an explosion in Bitcoin use despite the overnight collapse of the currency's biggest trading house on Monday.
People still do trust Bitcoin - I think it's the third-party institutions that consumers have to do their due diligence onMr Matonis previously worked at Visa as its chief foreign exchange trader and spoke to Fairfax Media on the sidelines of Mobile World Congress in Barcelona.
He said Bitcoin would recover from the mysterious overnight collapse of the world's biggest Bitcoin trading house, Mt Gox, which wiped more than $US300 million ($334.9 million) of the currency from the market.
"Any medium of exchange has the potential to be abused like that and Bitcoin is no different," Mr Matonis said. "Mt Gox failed because it failed to conduct the proper audits and the governance of that wasn't followed.
"But also the Japanese government didn't enforce the rules of existing regulations that were in place."
Mt Gox should never have been used as a bank for Bitcoins, he said.
"You could've kept your Bitcoins at home, you could've kept it on your laptop or on your phone," he said. "The ecosystem is actually getting stronger because of [the collapse], because the other exchanges are benefiting from this.
"People still do trust Bitcoin – I think it's the third-party institutions that consumers have to do their due diligence on."
Despite the collapse, Mr Matonis said the currency would continue to thrive and that Australia's consolidated banking sector, in which four big players dominate the market, was ideal for the controversial electronic currency.
"I think it would make it easier [for Bitcoin to become commonplace] and there's a similar situation in the Netherlands where they have four to five large banking institutions that are all connected through an existing payment network," he said. "Because of that, one Bitcoin exchange can hook into that payments network ... and they can have access to all of the country's banks.
"So I would say it's easier and Australia should look at what the Netherlands did."
Several institutions in Australia including the Reserve Bank of Australia and Eftpos are preparing for the creation of a central payments clearing hub.
The author travelled to Mobile World Congress courtesy of Huawei.