MEXICO CITY (Reuters) – Bitcoin is more like a means of barter than \u201cevolved\u201d fiat money, Mexico\u2019s central back chief said on Thursday, calling it a high-risk investment and a poor store of value.<\/p>\n
Bank of Mexico Governor Alejandro Diaz de Leon\u2019s comments suggest Mexico will not be following El Salvador any time soon in adopting the digital currency as parallel legal tender.<\/p>\n
\u201cWhoever 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,\u201d said Diaz de Leon.<\/p>\n
\u201cIn our times, money has evolved to be fiat money issued by central banks,\u201d he said. \u201cBitcoin is more like a dimension of precious metals than daily legal tender.\u201d<\/p>\n
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.<\/p>\n
Diaz de Leon pointed out that the value of cryptocurrencies have often swung wildly in a single day.<\/p>\n
\u201cPeople will not want their purchasing power, their salary to go up or down 10% from one day to another. You don\u2019t want that volatility for purchasing power. In that sense, it is not a good safeguard of value,\u201d he said.<\/p>\n
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.<\/p>\n
Bitcoin has been notoriously volatile. In April it rose to over $64,000 and fell almost as low as $30,000 in May.<\/p>\n
It last traded up 2.44% at $47,179.04.<\/p>\n