The governor of the Bank of Mexico, Alejandro Díaz de León, dismissed Bitcoin's (BTC) position as a reliable legal tender, citing price volatility as a major roadblock toward full-fledged adoption.

Díaz de León said in a Reuters interview that Bitcoin'southward position in today's financial system resembles "a dimension of precious metals" when compared to the central bank'south fiat money.

In stark dissimilarity to Republic of el salvador'due south mainstream Bitcoin adoption that requires businesses to take payments in Bitcoin, Mexico's central bank chief questioned Bitcoin'southward position as a feasible legal tender:

"Whoever receives bitcoin in exchange for a good or service, we believe that (transaction) is more alike to bartering because that person is exchanging a good for a adept, but not really money for a good."

Díaz de León too highlighted the inherent risk of daily price volatility when dealing with cryptocurrencies. Coincidently, the Salvadoran regime was a witness to this run a risk only i twenty-four hours later recognizing Bitcoin as a legal tender and buying its first 200 BTC worth $ten.4 1000000 at the time of purchase.

Taking advantage of the situation, Salvadoran President Nayib Bukele announced the purchase of more Bitcoin during the dip, resulting in a total holding of 550 BTC. According to Bukele, this move saved his administration "a million in printed paper."

Mexico'due south fundamental bank governor pointed out the need for reliability in terms of payment executions and value, stating "people volition not want their purchasing power, their bacon to go up or downwards 10% from one twenty-four hours to some other. You don't want that volatility for purchasing power. In that sense, it is not a good safeguard of value."

Related: Mexico may not be post-obit El salvador'southward instance on Bitcoin... yet

As Cointelegraph reported on June 28, regime from Mexico's finance ministry issued a warning confronting institutional offerings related to digital currencies, highlighting risks related to payments and value fluctuation.

The regulators have also said that no financial institutions in the land are authorized "to carry out and offer to the public operations with virtual assets," including Bitcoin, Ether (ETH) and XRP.