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Mexican central bank governor postpones CBDC launch date to 2025

Mexico’s Central Bank governor announced before the Mexican Senate that a CBDC Rollout is expected by 2025.

Mexico to launch CBDC by 2025

Victoria Rodriguez, governor of the central bank, said that the new sovereign digital currency would introduce more citizens to formal banking. “The digital currency seeks to generate means of payments aimed at financial inclusion, expand options for fast, secure, efficient, and interoperable payments in the economy, and implement complementary functionalities to the (existing) means of payment, such as automation mechanisms, programmability, and innovation,” she said.

Central bank-issued currency will not replace paper money but will instead expand the existing utility of the nation’s currency.

According to Statista, only 38.4% of the Mexican population has a bank account. As the Wall Street Journal reported, the economy is significantly dependent on paper money for most of the transactions, which take place in the informal sector of the economy. The informal economy will account for 22% of Mexico’s Gross Domestic Product in 2020.

According to Rodriguez, the new announcement also indicates that the central bank has become more open to the possibility of regulating digital currencies with the main goal of protecting the citizens who transact. “Several central bank groups, in which Banxico participates, are reviewing this issue of regulation so as to further protect those participating in the financial system.”

In December 2021, the Central Bank announced that the CBDC would launch in 2024. Banxico, Mexico’s central bank, began discussions with financial institutions last year about technical barriers involving the launch of a state-backed digital currency. The bank also describes a strategy to use the SPEI interbank payment method elements in its development and is working in tandem with the Bank for International Settlements.

In June 2021, Ricardo Salinas Pliego, the third richest man in Mexico, announced the construction of infrastructure to accept bitcoin at his bank, Banco Azteca. However, officials from the central bank, the finance ministry, and the securities watchdog said at the time that Bitcoin is not legal tender in Mexico and that financial companies may not offer crypto-related products. “Although they can be exchanged, they do not fulfill the function of money, as their acceptance as a form of payment is limited, and they aren’t a good reserve or value reference,” the officials said.

Senator Indira Kempis Martinez introduced a bill earlier this month that advocates that the government has a responsibility to usher in a new digital currency era, alleging government interference in such matters. is a human right for Mexican citizens. “The intervention of the Mexican State in the economy must be appreciated and assumed by the different legal operators as a native and inevitable relationship with the discourses of human rights, competitiveness, and development.”

Kempis used bitcoin to illustrate the power of a decentralized network like Bitcoin while conceding that any digital currency introduced is not decentralized. “Regarding protocols, computers operating on the network, which record the transactions of road assets, must follow the emission rules in order to confine transactions, and those rules must be established in predetermined protocols,” noted the bill. “There is a possibility that new computers may be part of the network. However, it is not a necessary feature.”

Kempis argued that establishing the bill as the law would lay the groundwork for bitcoin legal tender.

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