MEXICO CITY (Reuters) - Bitcoin is more like a means of barter than “evolved” fiat money, Mexico’s central back chief said on Thursday, calling it a high-risk investment and a poor store of value.
“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 said. “Bitcoin is more like a dimension of precious metals than daily legal tender.”
The Banxico boss argued that in order for a cryptocurrency to be considered money it must be a reliable payment method. He added that bitcoin would also need to safeguard its value.
Diaz de Leon pointed out that the value of cryptocurrencies have often swung wildly in a single day.
“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,” he said.
The unprecedented adoption of bitcoin earlier this week as legal tender by El Salvador has been beset by problems that have contributed to a rout in the value of the digital currency globally.
Bitcoin has been notoriously volatile. In April it rose to over $64,000 and fell almost as low as $30,000 in May.
It last traded up 2.44% at $47,179.04.
Reporting by Anthony Esposito; Editing by David Alire Garcia and Frank Jack Daniel