Bitcoin is akin to barter trade and is unfit for use as a currency, the head of the Mexican central bank has said, noting that digital currencies lack the values that all currencies must possess and are more similar to precious metals than they are to currencies.
Bitcoin is not evolved money as its proponents have touted, Alejandro Diaz de Leon, the governor of the Bank of Mexico stated recently.
“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,” the banker said.
In addition, digital currencies are a high-risk investment and a poor store of value, he added. Diaz de Leon, who has headed Mexico’s central bank since December 1, 2017, made the remarks at a time when some other countries have made major moves to allow digital currency payments. The biggest was by El Salvador whose Bitcoin Law mandating BTC payments took effect this week.
Panama is also exploring a similar path, although it doesn’t intend on forcing citizens to accept digital currency payments. For Mexico, such a move may not be in the offing, given the governor’s latest remarks.
The governor further pointed out that money has to be issued by a trusted entity, such as a central bank. “Bitcoin is more like a dimension of precious metals than daily legal tender,” he added.
If it’s to stand a chance of ever becoming legal tender globally, Bitcoin must become a reliable payment method and also safeguard its value. As they are today, digital currencies experience wild volatility and their values swing wildly, making them unfit for use as payment methods, the governor believes.
“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,” the governor added.
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