Central Bank of Mexico Will Launch Its CBDC In 3 Years

On April 21, Victoria Rodriguez Ceja, Governor of the Bank of Mexico (Banxico), stated during a session before the Mexican Senate that the CBDC (MDBC) will be introduced “in circulation” by 2025.

The CBDC will allow more people to participate in the financial system and take advantage of new payment choices, according to Rodriguez. They also expect to implement new automation technologies to speed up payments.

“Digital currency seeks to provide financial inclusion and expand payment possibilities by enabling fast, secure, efficient, and interoperable payments in the economy while also providing complementary functionalities such as automation capabilities, programmability, and innovation.”

This might postpone the Central Bank’s previous timetable by a few months. According to Cryptopotato, Mexico had intended 2024 as the year to launch a CBDC on December 31 of 2021. However, the news suggests that Mexico’s CBDC may enable additional services than just value transmission.

Banco de México Is Thinking on Regulating Cryptocurrencies

Although Mexico’s president, Manuel López Obrador, has ruled out the prospect of adopting Bitcoin or other cryptocurrencies as legal currency in the nation, the country’s central bank is presently working to give them greater legality via regulation.

The country’s central bank, Banxico, and other central bank organizations are looking at the prospect of regulating cryptocurrencies to safeguard consumers when making their transactions since they are not covered or regulated by the Bank of Mexico, according to Rodriguez.

“[Several] central bank groups, in which Banxico participates, are reviewing this issue [of regulation] to further protect those participating in the financial system.”

This means that even though Mexico is developing its own digital currency, it does not want to be left behind in terms of broader crypto regulations, which would also aid the Government in collecting more taxes, as they do in other countries such as Spain, the United States, and Brazil.

CBDCs Are Not Cryptocurrencies

The Governor of the Bank of Mexico, Loretta Mester, clarified the bank’s pro-crypto stance; nevertheless, she made it clear that cryptocurrencies are very distinct from CBDCs due to their decentralized nature, allowing users to have complete control of their money.

However, she made it clear that the appeal of CBDCs is that they are backed by the government because CBDCs are simply a digital representation of fiat money we all know and use. She added, nonetheless, that this new CBDC does not take the place of normal currency or banknotes in circulation. Still, it would be a viable alternative to the current means of payment.

The Bank of Mexico is collaborating with the Bank for International Settlements (BIS) to develop a CBDC; nevertheless, it’s not an easy task. There is a lot of work ahead. Indira Kempis, a pro-bitcoin senator, recently introduced legislation that would legalize a CBDC within the country’s legal framework, laying the groundwork for its successful implementation.

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