HomeCryptoBitcoin transactions ‘akin to bartering,’ Bank of Mexico governor says

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 stated in a Reuters interview that Bitcoin’s place in immediately’s monetary system resembles “a dimension of precious metals” in comparison to the central financial institution’s fiat cash.

In stark distinction to El Salvador’s mainstream Bitcoin adoption that requires companies to settle for 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 threat of every day value volatility when coping with cryptocurrencies. Coincidently, the Salvadoran authorities was a witness to this threat simply someday 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 in the course of the dip, leading to a complete holding of 550 BTC. According to President Bukele, this transfer saved his administration “a million in printed paper.”

Mexico’s central financial institution governor identified the necessity for reliability in phrases of 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 will 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 towards institutional choices associated to digital currencies, highlighting dangers associated to funds and worth fluctuation.

The regulators have additionally stated that no monetary establishments within the nation are licensed “to carry out and offer to the public operations with virtual assets,” together with Bitcoin, Ether (ETH), and XRP.