Mexico to have its own digital coin by 2024
by: Dynasty GI2022-01-05
Mexico’s central bank will have its digital peso by 2024, according to a statement issued via the country’s official presidential Twitter account. The government justified its decision based on how ‘these new technologies and the next generation payment infrastructure are extremely important as options of great value to advance financial inclusion’.
According to a report by Merchant Machine, Mexico is among the bottom five countries globally when it comes to financial inclusion, with some of the largest numbers of citizens without bank accounts, along with Morocco, Vietnam, Egypt and the Philippines. If the project by Mexico’s central bank, Bexico, goes ahead, it will join other countries like China and the Bahamas which are already trialling their own digital currencies. Mexico’s announcement may spur other Latin American countries to accelerate plans to create their Central Bank-issued digital currencies and regulate their crypto markets. Brazil’s central bank is also studying the digital currency sector and last December it stated that it is looking at ‘regulatory models’ for cryptocurrencies. It plans to look at Bitcoin and other cryptos as investment assets first, before engaging in how they may be used for the payment of goods and services. Also in December, lawmakers in Chile started working on proposals to legalise the use of Bitcoin and other cryptocurrencies for payments which, if approved, could pave the way for other crypto-based financial products. In the proposals presented by lawmaker Karim Bianchi, shops would be legally allowed to display the price of goods in Chilean pesos and Bitcoin. A lawmaker in Panama also put forward proposals to make cryptos accepted for transactions by its citizens and businesses based in the country, allowing them to use cryptos as means of payment for any legally permitted transaction. The proposals, yet to be voted, also give citizens the option to pay taxes and fees in cryptos. The moves by other Latin American countries are still modest when compared to El Salvador’s bold adoption of Bitcoin as a currency since September last year. The move made the Central American country the first in the world to have a crypto as legal tender. Since then, El Salvador also announced plans to create a ‘Bitcoin City’ to be financed by Bitcoin gains and designed to use volcano-generated thermal energy to attract Bitcoin miners. The moves are part of the country’s bigger plans to encourage more crypto-centric businesses to be based there.
"Latin America is a very strong ground for digital currency growth for a number of reasons: it has dynamic economies interested in innovation, relatively high banking costs and a sizeable migrant community based mostly in the US who are heavy users of money transfer systems for their remittances; cryptos and Blockchain technology have the power to transform that landscape with the right level of regulation to ensure consumers are protected whilst not choking off the sector’s creativity and innovation."
Commented Eduardo Carvalho, the founder and CEO of Dynasty Global Investments AG.