Mexico is fighting to introduce a government-backed virtual currency before 2024

The sovereign digital currency will not replace the Mexican currency but will coexist with the Mexican currency

On Wednesday evening, the Mexican government announced on Twitter that the Bank of Mexico plans to launch a digital currency within the next three years. The government believes digital currencies are essential to improving the nation’s financial health, the shared post said.

“Banxico reports that it will have its own digital currency in circulation by 2024 as these new technologies and next-generation payment infrastructure are extremely important as options of great value in promoting the country’s financial inclusion, ” read the translated tweet.

The news comes not long after the Bank of Mexico’s Deputy Governor Jonathan Heath announced that the bank is considering the option. In a virtual conference hosted by S&P on Tuesday, Heath noted that the central bank had a roadmap that it wanted to follow and planned to have the currency circulating without a hitch by the end of 2024. The bank official noted that Mexico did not want a delay in introducing virtual currencies.

“We are working on a project, we even have a schedule that we think we should maybe let it run perfectly by the end of 2024 at the latest.” Pagan revealed.

It does not replace cash

There hasn’t been much talk about the specifics of the digital currency, but it is expected to be begged for the value of the peso, the country’s traditional currency. Heath previously stated that if the digital currency were introduced, it would not displace the traditional currency. He explained that Mexico is not yet far advanced economically and therefore it is not possible to substitute the CBDC for cash.

He added that the country has poor financial inclusion and only a small fraction of the population has the means to use traditional banking.

“We will have paper money as the predominant form of payment domestically for a long time, so we don’t want to be absent from these technological advances.” he said.

This isn’t the first time the bank has hinted that a CBDC is on the way. Earlier this month, the bank’s newly appointed governor Victoria Rodriguez Ceja announced that tax authorities were weighing the idea of ​​a digital currency and launching it.

“International authorities, given the interest that these virtual assets and developments have generated, have recognized the need and potential for expanding legal tender functions through the potential introduction of central bank-issued digital currencies.” she said at the time.

More and more countries are adopting CBDCs

The North American country joins Nigeria (Africa), Sweden (Europe) and China (Asia), who also want to use their respective digital currencies soon. Other Latin American countries such as Peru and Brazil are also said to be in the process of bringing their digital currencies onto the market. Great Britain, the USA, Chile and India are also examining the option, albeit in different phases.

The latest remarks by Heath and Rodriguez Ceja contrast sharply with a statement made by President Andrés Obrador in October. When discussing the financial system and his government’s priorities, the Mexican president suggested that the country refrain from using unorthodox strategies and technologies. Obrador added that his government has made tax collection and curbing tax evasion a priority.

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