On April 21, Victoria Rodriguez Ceja, Governor of the Bank of Mexico (Banxico), said during a hearing before the Mexican Senate that the CBDC (MDBC) “will be in circulation” by 2025.
According to Rodriguez, the CBDC will enable greater financial inclusion for citizens while expanding existing payment options. They also expect to deploy new automation mechanisms to speed up payment processes.
“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.”
This would delay a little bit the previous schedule shared by the Central Bank. On december 31 of2021, Cryptopotato reported that the country had in mind 2024 as the year to launch a CBDC. The announcement, however, gives the idea that Mexico’s CBDC could support more services than just transmission of value.
Although Mexican President Manuel López Obrador ruled out the possibility of adopting Bitcoin or any cryptocurrency as legal tender in the country, Mexico’s own central bank is now seeking to give them greater legality through regulation.
Rodriguez said that Banxico and other central bank groups were studying the possibility of regulating the use of cryptocurrencies in the country to protect citizens when making their transactions since such transactions are not protected nor regulated by the Bank of Mexico.
“[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.”
This means that even though Mexico is launching its own digital currency (very different from a cryptocurrency), the country does not want to be left behind in terms of regulations of the broader crypto industry, which would also help the Government to collect more taxes, as it happens in other countries such as Spain, United States, and Brazil.
The Governor of Banxico clarified the bank’s favorable position towards a future regulation of the crypto industry; however, she emphasized that cryptocurrencies are very different from CBDCs because of their decentralized nature, which allows citizens to have full control of their money.
She clarified, however, that the advantage of CBDCs is that they are backed by the Government, as CBDCs are just a digital expression of the fiat money we all know and use.
On the other hand, she added that this new CBDC is not intended to replace the traditional currency or the banknotes in circulation. Still, it would be a strategic alternative to the current means of payment.
The Bank of Mexico is working closely with the Bank of International Settlements to develop its CBDC; however, the road is not easy. There is a lot of work ahead. Recently, the pro-bitcoin senator Indira Kempis introduced bill to include a CBDC into the legal system, paving the way for a successful implementation.