Digital currency will not displace cash, said a Banxico member.
Mexico has a law that regulates cryptocurrencies since 2019.
The Bank of Mexico (Banxico) seems to open the doors to the adoption of central bank digital currencies (CBDC, for its acronym in English).
According to a statement by the deputy governor of the financial institution, Jonathan Heath, the Aztec nation is preparing everything to launch its own digital currency in 2024.
“We’re working on a project, we even have a schedule where we think maybe by the end of 2024 at the latest, we should have it operating perfectly well by now,” Heath said, according a local medium.
This announcement coincides with the statements made by the newly appointed governor of Banxico, Victoria Rodríguez Ceja, in early December. The official express before the Finance and Public Credit Commission of the Mexican Senate, that the financial institution was in the analysis of the implementation of a CBDC.
“International authorities, given the interest that these virtual assets and their evolutions have aroused, have recognized the need and potential to extend the functionalities of legal tender through the potential implementation of digital currencies issued by the Central Bank”, indicated Eyebrow.
It should be noted that Mexico has one of the first laws in the region that regulates collective financing, management of electronic payment funds and the commercialization of cryptocurrencies. The so-called Fintech Law was enacted in 2019, a fact reported by CriptoNoticias.
There will be CBDC but also cash
Heath also spoke about the coexistence between a digital currency and cash.
In that sense, the official assured that lThe bills and coins will not be displaced by the CBDC, since in Mexico a large part of the economy is informal. He also indicated that there is low financial inclusion, that is, there are few people with access to traditional banking.
“We are going to have the use of paper money as the predominant payment at the national level for a long time, so we do not want to be absent from these technological advances; we are there, we are going to do it and we are going to be working, “added Heath.
AMLO chose to remain orthodox in financial matters
The statements of the Banxico authorities may come as a surprise, after last October, the president of Mexico, Andrés Manuel López Obrador, said that his government hopes to remain orthodox on financial matters.
According to López Obrador, his government should only ensure that the country’s income is maintained and ensure proper tax collection, avoiding evasion. In addition, he assured that you don’t need to be looking for innovation.
Made it clear that will not follow the path of countries like El Salvador regarding the adoption of bitcoin or other cryptocurrencies, as reported by CriptoNoticias.
With CBDC there is no privacy
While digital currencies, such as the one announced by Mexico, can benefit nations and businesses in cross-border trade, under these there is the risk of loss of privacy. These digital currencies are not anonymous and governments can take advantage of their use to exercise control over the population. They can also be confiscated by the state.