According to the Mexican government, the Bank of Mexico intends to issue its own digital currency by 2024 in order to promote financial inclusion in an economy that currently relies on cash for the majority of transactions.
The central bank considers it important “to use these new technologies and latest-generation payments infrastructure as valuable options to advance financial inclusion in the country,” the administration of President Andrés Manuel López Obrador said in a tweet late Wednesday.
The Bank of Mexico has stated that it is researching the development of a digital currency in stages. According to a recent report, the bank will use the current electronic payments system as the platform's foundation to expand payment options "in a rapid, safe, and efficient" framework
According to a person familiar with the Bank of Mexico's plans, central bank officials have been in discussions with financial institutions about the implementation and infrastructure required to launch a digital currency that could be used for basic transactions.
Cash is used in a large number of transactions, especially given Mexico's large informal economy, which accounted for approximately 22% of the country's GDP in 2020.
Given the volatility in their value and their limited acceptance, the central bank, known for its orthodox monetary policies, has warned against the risks of privately issued cryptocurrency assets such as bitcoin. Officials, on the other hand, have been open to central-bank digital currencies as a means of increasing financial inclusion.
Central banks must move quickly to develop new forms of money and fully operational digital currencies in light of the increasing use of crypto assets and the risks they entail, according to Bank of Mexico Governor Alejandro Daz de León, who spoke at an International Monetary Fund event in July.
In response, the Bank of Mexico, the Mexican finance ministry, and banking and securities regulators stated that cryptocurrencies, including bitcoin and others, are not legal tender in Mexico and that financial institutions are not permitted to offer operations involving such assets.
According to a 2021 survey conducted by the Bank for International Settlements, which is led by former Bank of Mexico Governor Agustn Carstens, 86% of central banks are researching the potential for central-bank digital currencies, 60% are experimenting with related technology, and 14% are running pilot projects.
According to the BIS, the goal of the research is to determine whether such currencies protect public trust in money, maintain price stability, and ensure safe payment systems