Banxico, the central bank of Mexico, has announced that it expects the development of its central bank digital currency (CBDC), the digital peso, to be completed in about three years. Victoria Rodríguez Ceja, the governor of Banxico, reported this before the Mexican Senate, adding that the new currency should fulfill the three characteristics of money to create more financial inclusion.
Banxico Governor reports CBDC progress
Banxico has provided a status update on its CBDC, the digital peso. Banxico Governor Victoria Rodríguez Ceja said the bank had a rough estimate of the time it would take for the currency to be completed and launched. During the bank’s visit to the Senate to present its annual report, Rodríguez Ceja stated:
We estimate that in this process we will need about three years for the final operation.
The governor also explained that this currency could be used as a medium of exchange, a unit of account and a store of value – three qualities of money. The development of this currency was announced back in December 2021 when the governor spoke, also before the Senate, about the possible functions that such a currency could have.
Financial inclusion and payments
Rodríguez Ceja compared cryptocurrencies and the developing CBDC and explained the differences between the two. She explained that the upcoming digital currency will be backed by the central bank and will be part of the country’s monetary base. Regarding cryptocurrencies, however, she warned:
Crypto assets are unsupported assets, they are not legal tender and their volatility can pose a risk to people who choose to have access to them.
Banxico expects that the future digital peso will be useful to improve the financial integration of more people into the banking system. In this sense, the currency should also offer another alternative to paying. Rodríguez Ceja explained that this new currency does not aim to replace the current system, but will serve as a tool to offer more opportunities to the underserved.
According to the World Bank, Mexico lags behind in financial inclusion, with only 37% of adults having access to a bank account in 2021. Likewise, only 32% have made or received digital payments. This puts Mexico at a disadvantage compared to similar countries in the region. The digital peso aims to improve this situation, with commercial banks also proposing to help shape the currency to achieve their goals.
What do you think of Victoria Rodríguez Ceja’s statements on the digital peso? Tell us in the comment section below.
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