Mexico was the next country to announce plans of launching a CBDC.
Banxico goes CBDC
To CBDC or not to CBDC? That does not seem to be much of a question these days. By now, you should know the drill: [insert country] announces the launch of its CBDC in [insert year].
This time, it’s Mexico that announced launch plans by 2024. According to a tweet on the official government account, Banxico (Mexico’s central bank) “will have a digital currency of its own in circulation” by 2024. As reasoning, Banxico considered it to be of “utmost importance” that new technologies are offered, which can be “options of great value to advance financial inclusion in the country.”
In a video conference organized by S&P, its deputy governor, Jonathan Heath, said in a video conference organised by S&P that Banxico plans to have its CBDC in place by the end of 2024. He also noted that paper money as “the preponderant payment domestically” was going to be used for a long time, but that the central bank did not want to “be absent from technological advances.”
Mexico’s interest in CBDCs is nothing new, as Banxico’s officials have previously expressed interest in launching their own coin. On December 2, the bank’s governor, Victoria Rodriguez Ceja, said that authorities had recognised the need and the potential to “extend the functionalitites of legal tender” through the launch of digital currencies by Banxico. Previously, Arturo Herrera, the country’s finance minister, had said that he does not consider cryptocurrencies legal assets or currencies.
Is Latin America less crypto-friendly than it seems?
Although plenty of countries like Nigeria and Indonesia have been getting a bad rap among crypto supporters for their CBDC policies, Latin America has been somewhat overlooked in that regard. El Salvador’s Bitcoin bet brushed over the fact that this region may, in fact, be much less crypto-friendly than it appears on the surface.
Brazil, for instance, is planning to launch a CBDC pilot programme of its own for 2022. Peru has also said that it was looking into developing a digital currency. With Mexico adding to this list, that is already the two most populous countries (and Peru) more or less committing to a CBDC, which simultaneously rules out Bitcoin as legal tender.
The only country that has seemed somewhat open to crypto-friendly legislation is Paraguay, although it does not have any imminent plans to follow El Salvador’s path.
The future is CBDC
Crypto bulls will thus have to come to terms with the fact that eventually, most countries will make use of the new technology, just not in the way they may have hoped for. The best Bitcoin and other cryptocurrencies can hope for seems to be peaceful co-existence alongside official digital currencies. With companies like Visa and Mastercard already working on integrations with CBDCs, crypto advocates should set their sights on carving out friendly regulation. Even though that may not be the crypto utopia many had hoped for, it still beats outright bans like in China.
