The Governor of the Central Bank of Mexico (Banxico), Victoria Rodriguez, stated before the nation’s Senate that it will issue a CBDC by 2025. Rodriguez believes the new national digital currency would encourage more people to use conventional financial services.
As she put it, “cryptocurrency seeks to encourage payment method focused on financial inclusion while also expanding options for secure, fast, interoperable, and efficient payments in the nation’s economy. It also seeks to implement integrated features to present payment methods such as innovation, automation mechanisms, and programmability.”
While the electronic currency would not substitute real notes, it will increase the present use of the Mexican currency. As stated by Statista, 38.4% of the Mexican population has access to a financial institution. According to the Wall Street Journal, the economy is heavily reliant on fiat currency for most transactions, which take place in the informal sector and are not recorded. Mexico’s informal sector contributed 22% to the nation’s GDP in 2020.
In addition, the governor noted that the latest declaration implies that Banxico has grown more receptive to the potential of regulating cryptos, with the main purpose of safeguarding people who engage in financial transactions. Several central bank committees are now reviewing this topic of regulation to safeguard people who are involved with the industry.”
Progress Of CBDC
According to the Central Bank’s announcement made in December, the CBDC will be implemented in 2025. Banxico initiated negotiations with financial firms last year about the technological challenges involved in creating a state-backed virtual currency that the government would support. In addition, the bank revealed a plan for incorporating components of its SPEI interbank payments technique into the development process, which is being carried out in collaboration with the BIS (Bank for International Settlements).
Sen. Kempis Says “CBDC Is A Fundamental Human Right”
The draft proposal, introduced at the beginning of April by Sen Indira Kempis Martinez, argues that the state is accountable for embracing the new age of digital money and that government action in such things is a fundamental right for its citizens. According to Kempis, “the government’s involvement in the nation’s economy should be recognized and accepted by the various legal institutions as a natural and unavoidable link with the concepts of civil rights, competition, and growth.”
The bill stated that;
“Protocols must be developed in advance to keep transactions under control. Computers that will record these transactions must confine them under certain rules established before the CBDC is released. More machines may be added to the network soon. But it is not an essential feature in this case.”
Kempis believes that enacting the bill into law will pave the groundwork for the eventual legalization of Bitcoin as legal cash.