Alejandro Diaz de Leon, Mexico’s Central Bank Governor, said Bitcoin (BTC) is not an advanced form of money as believed by enthusiasts, rather he thinks the cryptocurrency is best considered as a means of barter.
Describing Bitcoin as “good,” the Bank of Mexico head said in a Reuters report today that people who exchange their products and services for the cryptocurrency are only bartering.
“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,” Diaz de Leon said.
The governor’s view about what should be regarded as money are fiats issued by a country’s central bank.
Bitcoin’s High Volatility Doesn’t Make It Money
According to Diaz de Leon, for Bitcoin to be considered as real money, then its price needs to be stable in order to safeguard value, prompting him to call the asset a “poor store of value.”
“People will not want their purchasing power or their salary to go up or down 10% from one day to another. You don’t want that volatility of purchasing power. In that sense, it is not a good safeguard of value,” he added.
His comments come amid Tuesday’s market dip that saw several cryptocurrencies, including Bitcoin, shred significant percentages of their value moments after El Salvador officially adopted BTC as a legal tender.
Bitcoiners Think Otherwise
The cryptocurrency community may disagree with Mexico’s apex bank governor’s comments over Bitcoin being a poor store of value.
Recall that since the peak of the coronavirus pandemic, several investors have adopted the world’s largest cryptocurrency as a hedge against inflation.
Despite Bitcoin’s massive dip in mid-May that saw its price plummet from above $64,000 to $30,000 due to China’s clampdown on cryptocurrencies, BTC is still regarded as one of the best financial instruments on a year-to-date (YTD) basis.
Financial Experts Hostile Towards Crypto
Diaz de Leon’s comment may not come as a shock to most crypto enthusiasts given that several traditional financial experts are always speaking out against cryptocurrencies in general.
Earlier today, Sweden’s Central Bank Governor said Bitcoin is like a trading stamp, which may eventually collapse.
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