On Monday, U.K. Prime Minister David Cameron declared bitcoin a currency and said it is a threat to the nation’s economy.
Bitcoin’s price surged to a record high of $1,898.57 on Monday, making it the biggest gainer in the virtual currency’s price history.
The surge was driven by the U.KS. central bank’s decision to issue a paper that declared bitcoin is not a legal tender.
U. S. Federal Reserve Chair Janet Yellen has been skeptical of the idea of virtual currencies, saying that they are too volatile.
The virtual currency is traded on virtual exchanges like Mt.
Gox, a Tokyo-based exchange.
The price of bitcoin is now trading at around $1 billion a coin.
Bitcoin is also gaining popularity in China, where authorities are considering banning it.
China’s central bank on Tuesday approved the creation of virtual currency companies and other virtual currencies that will be backed by the country’s central government.
In November, the country passed legislation to make virtual currencies legal.
The law allows the issuance of new digital currencies, which will have to be backed with the central government’s money supply.