El Salvador governor: Bitcoin is'more of akin to bartering'

El Salvador governor: Bitcoin is'more of akin to bartering'

In Mexico, Bitcoin is more like barter than evolved fiat money, the central back chief of MEXICO City Reuters said on Thursday, calling it a poor investment and high-risk store of value.

El Salvador Governor Alejandro Diaz de Leon's comments suggest Mexico will not be following Mexico any time soon in adopting the digital currency as parallel legal tender.

Whoever receives bitcoin in exchange for a good or service, we believe that transaction is more of akin to bartering because that person is exchanging a good for a good, but not really money for a good, stated Diaz de Leon.

In our times, money has evolved into fiat money issued by central banks, he said. Bitcoin is more like a dimension of precious metals than daily legal tender. 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.

Diaz de Leon pointed out that cryptocurrencies have often swung wildly in a single day.

People will not want their purchasing power, their salary, to go up or down 10% from one day to another. You don't want volatility for purchasing power. In that sense, he said, it is not a good safeguard of value.

The unprecedented adoption of Bitcoin later this week by El Salvador as digital currency had led to a significant downturn in value in the currency globally.

Bitcoin has been notoriously volatile. In April it fell to over $64,000 and rose almost as low as $30,000 in May.

It last traded up for $22.44% at $47,179.