- Mexico’s central back chief said on Thursday that bitcoin is more like a means of barter than “evolved” fiat money
- The remarks suggest Mexico will not be following El Salvador — at least any time soon — in adopting the digital currency as parallel legal tender
- In order for a cryptocurrency to be considered money, it must be a reliable payment method and must be able to safeguard its value
- In April, bitcoin rose to more than US$64,000 (A$86,760) before falling to US$30,000 (A$40,668) in May
- As of this morning, bitcoin is trading at US$46,405 (A$62,907)
Mexico’s central back chief said on Thursday that bitcoin is more like a means of barter than “evolved” fiat money, calling it a high-risk investment and a poor store of value.
The remarks by Bank of Mexico Governor Alejandro Diaz de Leon suggest the country will not be following El Salvador — at least any time soon — in adopting the digital currency as parallel legal 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,” said Diaz de Leon.
“In our times, money has evolved to be fiat money issued by central banks,” he added. “Bitcoin is more like a dimension of precious metals than daily legal tender.”
Diaz de Leon also argued that in order for a cryptocurrency to be considered money, it must be a reliable payment method and must be able to safeguard its value.
“People will not want their purchasing power, their salary to go up or down 10 per cent 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.”
El Savlador’s unprecedented adoption of bitcoin as legal tender earlier this week has brought a raft of problems, which have in turn contributed to a slide in the digital asset’s value globally.
This year has been particularly volatile. In April, bitcoin rose to more than US$64,000 (A$86,760) before falling to US$30,000 (A$40,668) in May.
As of this morning, bitcoin is trading at US$46,405 (A$62,907).