Mexico’s central bank chief says bitcoin is a barter instrument

Bitcoin is more like a barter instrument, the use of which is associated with high risk, than “evolved” money. This was stated by Mexico’s central bank governor Alejandro Díaz de León, according to Reuters.

“When someone receives bitcoin in exchange for a good or service, we consider that [transaction] more akin to barter. A person exchanges a good for a good, but not for money. The latter in our time are fiat currencies issued by central banks. Bitcoin is more like a precious metal than a legitimate means of payment for everyday transactions,” he explained.

According to Díaz de León, for cryptocurrencies to be recognised as money, the asset class must become a reliable means of payment. They must also serve as a store of value, though this is hindered by price volatility.

“People do not want their purchasing power, their salaries, to rise or fall day by day by 10%. You do not want to see such volatility in purchasing power. In this sense he [bitcoin] is not a reliable store of value,” the official stressed.

At a recent conference, Sweden’s central bank governor Stefan Ingves compared buying and selling bitcoin to the trading of marks, casting doubt on the viability of currencies lacking state backing.

“Usually private money collapses sooner or later,” Bloomberg quotes Ingves.

Earlier in August, the president of the Central Bank of Brazil Roberto Campos Neto expressed support for regulating cryptocurrencies.