Much has been said and commented on virtual cryptocurrencies, with bitcoin being the best known. There are fears that this digital money without physical representation may undermine the monetary control of central banks and put financial stability at risk. Bitcoin, or any virtual currency, is created to satisfy an operation between two private parties without the involvement of a central authority. It uses blockchain technology: a data file that contains the property registry, all transactions and the creation of bitcoin units, that is, it includes traces or traces of its use. It is the "logbook" of the system, but it is not unique, each participant can create their own copy of the ledger. The bitcoin blockchain is a sequence of algorithms that defines blocks where each one is based on its predecessor and contains new information about its characteristics. To use bitcoin, a software (wallet) is downloaded, which allows receiving, storing and sending bitcoin units. With it, fiduciary coins (dollars, pesos, etc.) are also exchanged with bitcoins.
Bitcoin does not comply with the three basic functions to be considered money: due to the great volatility in its price, it is not a good store of value nor is it used as a stable generalized unit of account; its function as a means of exchange is practically non-existent because it is not used to transact goods and services in the legal economy but speculative operations of financial investment. The exception is its illegal use in the dark web, where it is the prominent currency to buy weapons and drugs. Obviously, it is not part of the monetary base, and the proportion of the bitcoin stock in relation to the size of the latter in any country is insignificant.
Also, in view of their fragility and exaggerated fluctuation, they do not cause confidence for sustained stability. Another aspect is its inefficiency. Agustín Carstens refers to bitcoin as "a combination of a speculative bubble, a Ponzi scheme and a disaster for the environment" (BIS speech, 2/6/2018). The computers that work the blockchain algorithms consume a large amount of energy that is estimated to be 58.3 TeraWatt / hour annually, similar to the total consumption of Kuwait. Due to all the above, virtual currencies do not threaten, for now, the control of a national monetary system based on the "physical" fiduciary currency.
However, central banks must remain attentive to this type of technological development and work in coordination with financial regulatory entities to foresee adverse impacts. Especially because they can encourage their use in the illegal economy and in money laundering activities.
In Mexico, the recently approved Fintech Law recognizes cryptocurrencies as a virtual asset and establishes that the Bank of Mexico will regulate and monitor them widely. This is intended to prevent this digital money from being a risk to financial stability.
