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President of Peru’s central bank bashes value of cryptocurrencies

Julio Velarde, President of the Central Bank of Peru, stated that the bank does not accept bitcoin as payment as it is a "very volatile financial asset" that people buy to mitigate volatility risk.

Julio Velarde, the head of Peru’s Central Bank, recently offered his thoughts on cryptocurrencies and the bank’s views. He highlighted bitcoin and other cryptocurrencies’ volatility, calling them “very volatile financial instruments.” He further stated that this is also the most appealing aspect of cryptocurrencies since users and traders buy them because of the risk.

According to Velarde, one of the causes of this instability is the absence of fundamental value in these assets. As a result, “people may not want to own it, and then the price may fall to whatever,” he said.

He also stated that there are environmental risks associated with the use of cryptocurrencies, citing the fact that they consume a lot of electricity. Velarde stated:

The issue with cryptocurrencies right now is climate change. Mining bitcoins continues to use the energy of a medium-sized country. These are substantial sums.

Velarde also provided an update on the institution’s progress toward the creation of its own digital currency. He indicated that the bank is preparing a paper to be given in a month and a half, following a meeting with the Central Bank of India and the International Monetary Fund in the coming days.

The president of the central bank was eager to connect these digital fiat alternatives to cryptocurrencies, emphasising that central banks will support them.The administration stated the following about the growth of Peru’s CBDC:

I believe that the road we must pursue is one in which we accompany progress by providing guidance and establishing some regulatory limits. We don’t know how the new payment geography will be implemented in Peru.

Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.
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