The governor of the Bank of Mexico, Alejandro Díaz de León, removed Bitcoin’s (BTC) position as a solid legal tender. He quoted price volatility as a significant roadblock towards full-fledged appropriation.
Governor Díaz de León expressed in a Reuters interview that Bitcoin’s place in today’s financial system mirrors a dimension of precious metals compared to the central bank’s fiat money.
President Bukele’s comments
In severe contrast to El Salvador’s mainstream Bitcoin choosing that demands businesses to receive payments in Bitcoin.
Whoever receives bitcoin in the transaction for a good or service believes that (marketing) is more related to bartering because that person is trading a good for a good, but not money for good.
Díaz de León also highlighted the immediate peril of daily price volatility when trading with cryptocurrencies. Coincidently, the Salvadoran government was a signatory to this risk just one day after accepting Bitcoin as a legal tender and purchasing its first 200 BTC. It merited $10.4 million at the time of acquisition.
Considering the situation, El Salvador’s President Nayib Bukele declared the acquisition of more Bitcoin throughout the dip. Therefore, ending in a total holding of 550 BTC. As stated by President Bukele, this move protected his administration a million in the printed paper.
Mexico’s central bank governor aimed out the demand for reliability concerning payment executions and value. People will not want their purchasing power, their salary to go higher or down 10% from one day to another. You don’t desire that volatility for purchasing power. For that reason, it is not a sufficient safeguard of value.
As previously reported on June 28, Mexico’s finance ministry authorities published a warning versus institutional offerings linked to digital currencies. They highlighted risks connected with payments and value fluctuation.
The regulators have also stated that no financial institutions can take out and offer general operations with virtual assets, covering Bitcoin, Ether (ETH), and XRP.