• High-ranking officials have confirmed that the Bank of Mexico (Banxico), plans to introduce the digital peso by 2024.
• Due to the fact that almost two-thirds Mexicans are not bankrupt, authorities recognize that cash is still a major part of Mexico’s economy.

Mexico will likely be the first country in Latin America that joins the Club of Nations with Central Bank Digital Currency (CBDC). Gabriel Yorio, the Undersecretary for Finance confirmed this news when he presented an analysis of the usage of digital payments and subsequent decline in those in cash.

Yorio said that “I think there’s a moment in digital platforms intensive use, reduced cash usage and ultimately I think Mexico will have one of first digital currencies.” Yorio spoke during the presentation of Survey of National Financial Education.
Official explained that digital payments have been encouraged by the issuing institution through the CoDi platform. “Once you have a digital currency that works like a traditional currency, which is more likely to be used for electronic commerce, it will help consolidate a digital bail bond agenda in Mexico,” he added.
Authorities recognize that a significant portion of Mexico’s economy is still dependent on cash because the large unbanked population, which amounts to almost 60%, mainly resides in rural areas far from cities and other marginalized regions.

In 2024, the Digital Peso will be launched

Banxico intends to release its digital currency by 2024. It will make it possible for more Mexicans and their families to join the financial system. Mexico could become the first country to issue a CBDC if this happens.

The Sand Dollar was the first digital currency to be launched in Latin America and the rest of the world by The Bahamas. Soon after the launch of the Sand Dollar, Sweden created the eKrona. There are around 100 CBDC-related projects in the various phases of testing, analysis, and development.

Chile is the other country that is making significant progress in issuing digital currencies. It is likely that the launch will be decided by Chile in early 2023.

Mexico sees blockchain technology as an important tool to enhance financial inclusion and to improve payment systems.

Banxico was pleased to announce that its digital currency will be in circulation by 2024. It considers these technologies and next-generation payment infrastructure as being of paramount importance, which could help to improve financial inclusion in the country.” The statement was made on Twitter (NYSE) on December 29th.

Flipside

• The recent announcements and plans for the launches of centralized digital currencies come at a critical time for private cryptocurrencies, which have lost some $200 billion in market cap due to a variety of factors, including fears surrounding interest rate hikes by the world’s central banks.

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