Bank of Mexico Governor Agustin Carstens said today (in a lecture at ITAM) that Bitcoin is not a virtual currency because it does not have the backing of a central bank or tax-paying nation.
He also argues that the anonymity of Bitcoin has made its primary use in criminal activity (what he calls “black spins.”)
What’s unfortunate about this sentiment (and it seems to represent financial sentiment by the Mexican central bank) is that a country with such disparaging currency value has an outlet to solve the problem. As China and other nations have been investing in cryptocurrencies as a better value than their own state issued currency, they have found a way of reshaping their financial future.
Mexico is once again on the wrong side of history. Given a chance to forgo the losses on the peso (valued at $0.056 USD), they could adopt cryptocurrencies at an institutional level. It is highly unlikely that the Mexican peso will ever reach parity with the USD and in what seems like a reasonable way out, the nation is once again struggling to address the current state of technology.
Fear of the Unknown
While not expressed in word, the meaning behind Carstens’ words is that of fear. He is afraid of something he doesn’t quite understand. He is used to having a central banking authority. He is used to having tracible transactions.
This has and will continue to change and cryptocurrencies are reshaping the way we view the world.
Mexico will Adopt Cryptocurrency
As other Latin-American countries switch to adopt cryptocurrencies, Mexico will (in time) also come along. By that time though, they’ll once again be at the back of the pack.
In order for Mexico to really come out strong, it will need (as a nation) to agree to embrace the future. To let go of the old ways of control and manipulation. This is indeed unregulated, but it’s also a far better solution than what they currently have. In time this will be realized, and hopefully, it won’t take further economic failures before they reach that understanding.