Bitcoin transactions ‘akin to bartering,’ Bank of Mexico governor says
The governor of the Bank of Mexico, Alejandro Díaz de León, dismissed Bitcoin’s (BTC) place as a dependable authorized tender, citing value volatility as a serious roadblock in direction of full-fledged adoption.
Governor Díaz de León mentioned in a Reuters interview that Bitcoin’s place in in the present day’s monetary system resembles “a dimension of precious metals” when in comparison with the central financial institution’s fiat cash.
In stark distinction to El Salvador’s mainstream Bitcoin adoption that requires companies to just accept funds in Bitcoin, Mexico’s central financial institution chief questioned Bitcoin’s place as a viable authorized tender:
“Whoever receives bitcoin in exchange for a good or service, we believe that (transaction) is more akin to bartering because that person is exchanging a good for a good, but not really money for a good.”
Díaz de León additionally highlighted the inherent danger of every day value volatility when coping with cryptocurrencies. Coincidently, the Salvadoran authorities was a witness to this danger simply in the future after recognizing Bitcoin as a authorized tender and shopping for its first 200 BTC value $10.4 million on the time of buy.
Taking benefit of the scenario, El Salvador’s President Nayib Bukele introduced the acquisition of extra Bitcoin through the dip, leading to a complete holding of 550 BTC. According to President Bukele, this move saved his administration “a million in printed paper.”
Mexico’s central financial institution governor identified the necessity for reliability when it comes to fee executions and worth stating “people will not want their purchasing power, their salary to go up or down 10% from one day to another. You don’t want that volatility for purchasing power. In that sense, it is not a good safeguard of value.”
Related: Mexico might not be following El Salvador’s instance on Bitcoin… but
As Cointelegraph reported on June 28, authorities from Mexico’s finance ministry issued a warning in opposition to institutional choices associated to digital currencies, highlighting dangers associated to funds and worth fluctuation.
The regulators have additionally mentioned that no monetary establishments within the nation are approved “to carry out and offer to the public operations with virtual assets,” together with Bitcoin, Ether (ETH), and XRP.