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Bitcoin Transactions ‘Similar to Bartering’, Says Bank of Mexico Governor

The governor of the Bank of Mexico, Alejandro Díaz de León, rejected the status of bitcoin (BTC) as a credible legal tender, citing price volatility as a major obstacle towards full adoption.

Governor Diaz de Leon said in a Reuters interview that bitcoin’s position in today’s financial system resembles “a dimension of precious metals” when compared to central bank fiat money.

Unlike El Salvador’s mainstream bitcoin adoption, which requires businesses to accept payments in bitcoin, Mexico’s central bank chief questioned bitcoin’s status as a viable legal tender:

“Whoever receives bitcoin in exchange for a good or service, we believe that (the transaction) is tantamount to barter because that person is exchanging the good for a good, but not actually money for the good. “

Diaz de Leon also highlighted the inherent risk of daily price volatility when dealing with cryptocurrencies. Incidentally, the Salvadoran government witnessed this exposure just a day after recognizing bitcoin as legal tender and buying the first 200 BTC for $10.4 million at the time of purchase.

Taking advantage of the situation, El Salvador President Nayib Bukele announced the purchase of more bitcoins during the fall, resulting in a total holding of 550 BTC. According to President Bukele, this Step Saved his administration “a million in printed paper”.

The governor of Mexico’s central bank pointed to the need for credibility in terms of payment execution and value, saying that “people don’t want their purchasing power, their wages to go up or down 10% from day to day. You buy power.” For they don’t want volatility. In that sense, it’s not a good hedge of value.”

related: Mexico Isn’t Following El Salvador’s Example On Bitcoin… Yet

As Cointelegraph reported on June 28, officials from the Mexican Ministry of Finance issued a warning against institutional offerings related to digital currencies, highlighting the risks associated with payments and price volatility.

The regulator also stated that no financial institution in the country is authorized to “conduct and offer public operations with virtual assets,” including bitcoin, ether (ETH) and XRP.

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