Two presidents of Central Banks has shared their opinions on Bitcoin after the cryptocurrency became the legal tender in El Salvador. Bank of Mexico President sees Bitcoin as a high risk investment, while the President of Swedish Central Bank Riksbank believes that Bitcoin can collapse.
Bank of Mexico governor, Alejandro Diaz de Leon, said on Thursday that Bitcoin is more a means of barter than fiat money, Reuters said, adding that the cryptocurrency is a “high-risk investment and a weak asset for storing value.”
The head of Banxico is an economist; he was appointed by the President of Mexico as governor of the central bank. He was quoted as following:
“Whoever receives bitcoin in exchange for a good or a service, we think this is more akin to barter because that person exchanges good for good, but not really money for good.”
“In our time, money has evolved to become fiat money issued by central banks. Bitcoin is more like a precious metal dimension than an everyday currency. ” he continued.
His comments suggest Mexico will not adopt bitcoin as its national currency, as El Salvador did. The Salvadoran Bitcoin Act entered into force on September 7 and BTC is now a legal tender alongside the US dollar.
The head of the Bank of Mexico argued that for a cryptocurrency to be considered money, it must be a reliable method of payment. However, he said that cryptocurrencies are very volatile, noting that their values often fluctuate rapidly every day. The president of Banxico said:
“People will not want their purchasing power, their wages to rise or fall by 10% overnight. You don’t want such volatility in purchasing power. In that sense, bitcoin is not a good safeguard of value. “
Meanwhile, Swedish central bank governor, Stefan Ingves, compared buying and selling bitcoin to postage stamps. Bloomberg reported on Thursday that it commented on bitcoin at a banking conference in Stockholm, warning that the cryptocurrency could collapse.
Ingves is also an economist. Previously, he served as chairman of the Basel Committee and director of the Monetary and Financial Systems Department at the International Monetary Fund (IMF). He was quoted saying:
“Private money will usually collapse sooner or later. And of course, you can get rich by trading bitcoins, but this is comparable to trading stamps. “
The head of Riksbank previously said that bitcoin and other cryptocurrencies are unlikely to escape regulatory oversight as their popularity grows.
09/15/2021, Mr Advice TEAM