Buenaventura believes that volatility will not allow the pioneering cryptocurrency to last as a currency. Besides mentioning something the community already knows, the official had misconceptions about Bitcoin.
Rodrigo Buenaventura is the president of the National Securities Market Commission (CNMV) of Spain. The official recently said that the mass adoption of Bitcoin as a payment method would not allow it to remain profitable as a speculative asset. The official considers that a volatile and profitable cryptocurrency will not last as a currency and vice versa.
He explained that the successful acceptance of a cryptocurrency would be associated with the stabilization of its value. In other words, it will stop offering profitability to begin to provide stability. Those statements from the CNMV, which does not yet regulate cryptocurrencies, have always been evident to the Bitcoin community.
According to the equation, the greater the adoption of Bitcoin, the less abrupt variations in its price will be. That will make it easier to use as a stable reference to value goods and services and a unit of account.
Other Comments from the CNMV of Spain on the Pioneering Cryptocurrency
Buenaventura called on Spanish investors to be cautious with allegedly concealed information about the risks of those assets. On the Internet, there are often get-rich-quick promotions that are not such, said the official.
The head of the CNMV also stated that cryptocurrencies lack a stream of payment flows determining an intrinsic value. In his opinion, that is why crypto assets are more similar to currencies than other financial instruments. However, he clarifies that cryptocurrency deposits do not earn any interest.
Of course, that is not entirely true, as some non-banking entities offer services with cryptocurrencies that include the payment of interest on deposits. Similarly, some decentralized finance platforms (DeFi) also earn interest for depositing tokens in their smart contracts.
Another negative aspect he sees in Bitcoin is that there are no guarantees that someone will not manipulate the market. In that regard, he mentions recurrent fake information that inflates the price of the cryptocurrency. The official is also wrong about false transactions since the basic principles of Bitcoin indicate that the blockchain is immutable and unalterable.
The president of the CNMV dismissed the value of cryptocurrencies regarding their ability to create value for long-term investors. He only referred to those that become locally and internationally accepted as means of payment.
Anyone can deny what the head of the CNMV stated just by looking at the evolution of the price of Bitcoin in recent years. Those who have invested in the cryptocurrency in the long term have made a profit so far.
The Use of Bitcoin as a Unit of Payment
What Rodrigo Buenaventura has raised about Bitcoin and other cryptocurrencies already has experiences in other countries. For example, El Salvador has already accepted the pioneering cryptocurrency as legal tender, for which its citizens already use it for business transactions.
In the case of Cuba, the regulatory authorities recognized payments with cryptocurrencies through its Central Bank. That step is not as big as that of El Salvador, but both contribute to having the first conclusions about the adoption of Bitcoin.
By Alexander Salazar
