Banco de Mexico Governor: Bitcoin is Commodity Rather than Currency

Banco de Mexico (Bank of Mexico) Governor Agustín Carstens thinks the digital currency Bitcoin should be classified as a commodity rather than as a currency. The bank governor argued that Bitcoin does not meet the existing definition of currency because it is not supported by a government or central bank.

According to the report by local Mexican newspaper El Economista, Carstens argued further that since there is nothing to ensure its accounting in a financial system, the virtual currency should be considered as a commodity.

He also added that the cryptocurrency should be considered as an “issue of cybersecurity” due to its potential in anonymity and use in cybercrime activities.

As a reaction to economic woes affecting Mexico, as well as potential future problems as a result of US policy, alternative currencies like Bitcoin go up.

Digital currency exchanges in Mexico are thriving and ever-increasing trade is being witnessed. 

Other arguments and developments over Bitcoin

Carstens presented his comments on Bitcoin during his lecture at the Mexican Technical University ITAM.

In his presentation, he also discussed the efforts by the government to regulate financial technologies (fintech) like digital currencies.

He argued that any technological development in the financial system cannot be the result of innovation alone, but should be implemented in tandem with regulation by the financial regulators.

Previous position by the Mexican government on Bitcoin

The Mexican government, through its central bank, has previously expressed its negative views on digital currencies, particularly Bitcoin. In 2014, the Bank of Mexico has announced that virtual currencies are not legal tender in the country, and therefore, illegal.

The central bank also prohibited the use of the cryptocurrencies by regulated financial institutions in the country due to the inherent risks that are associated with their use. The bank also cited the warnings issued by various central banks around the world on the link between the digital currencies and illegal activities like fraud and money laundering.