The president of the Central Bank of Peru, Julio Velarde, has attacked the cryptocurrency’s value and pointed out the negative effects that they have on the environment. Velarde stated that the Bank does not consider bitcoin to be a payment method in a recent interview. Velarde instead referred to bitcoin as a “highly volatile asset” that people buy for the volatility risk.

President of Bank of Peru Blasts

Julio Velarde is the president of Central Bank of Peru. He recently shared his views and the considerations the bank has regarding cryptocurrencies. According to the official, these new elements were not as good as their fiat counterparts.

Velarde was the first to mention the volatility of bitcoins and other cryptocurrency, saying that they were “highly volatile financial instruments.” Velarde further explained that this is what makes them attractive because traders and people buy them for this risk.

According to Velarde, one of the causes of volatility is the absence of intrinsic value for these assets. Velarde explained that this is because people may lose interest in the asset, and then it can drop to .”

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Velarde explained that there are environmental concerns about the use cryptocurrency, as they pose a problem because of their energy consumption. Velarde declared:

Climate change is the problem with cryptocurrency. It is not the most friendly to the environment. Mining bitcoins continues to consume the energy of a small country. These are huge amounts.

Velarde’s Report on Peru’s Central Bank Digital Currency

Velarde also presented a report about the progress made by the institution in the creation of its digital currency. He stated that the bank is working on a document to be presented in a month and a half, after meeting with the Central Bank of India and the International Monetary Fund in coming days.

The president of the central bank was quick to draw a comparison between these digital fiat counterparts and cryptocurrencies, stating that they will be supported by central banks. The executive said:

I believe the only path to growth is one that includes guidelines and regulations. We don’t know what the new payment geography will look like in Peru.

Velarde announced last November that the bank was working on a Peruvian digital currency focused on payments. Also, a law to regulate cryptocurrency transactions and the actions of VASPs (virtual asset service providers) on Peruvian soil was introduced in December.

What do you think about the opinion of the president of the Bank of Peru on cryptocurrencies? Please leave your comments below.

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