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Mexico to launch its own digital currency to advance financial inclusion

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The Central Bank of Mexico (Banxico) has announced that it plans to launch its own central bank digital currency (CBDC).

The initiative was confirmed by a Twitter post by the Mexican government:

The @Banxico informs that by 2024 it will have its own digital currency in circulation, considering these new technologies and the next-generation payment infrastructure are extremely important as options of great value to advance financial inclusion in the country.

Mexican digital currency

According to the deputy governor of Banxico, Jonathan Heath, the financial authority does not want to distance itself from technological developments:

“We will have the use of paper money as the predominant payment in the domestic market for a long time. So we don’t want to be left out of these technological advances,” said Heath.

Thus, Mexico joins Latin American countries like Brazil and Venezuela that are already working on the development of CBDCs.

According to interactive map prepared by the Atlantic Council’s GeoEconomics Center to track the adoption of CBDCs, in South America, Peru and Chile are already researching CBDCs.

In Central America, Honduras, Guatemala and Belize are also in the research phase to launch their CBDCs. In the Caribbean, the Bahamas has already launched its state-owned cryptocurrency called Sand Dollar. The country was the first in the world to do so in October 2020.

Also according to the map, 87 countries (representing more than 90% of global GDP) are exploring a CBDC. As of May 2020, only 35 countries were considering a national digital measure.

Global CBDC Adoption Map.

Global CBDC Adoption Map. Source: Atlantic Council

The announcement of a Mexican digital currency isn’t exactly new. After all, on December 2, Banxico Governor Victoria Rodriguez Ceja said that the monetary authority was already analyzing the possibility:

“Authorities at the international level, given the interest that these virtual assets and their evolutions have aroused, recognized the need and the potential to expand the functionalities of legal tender through the potential implementation of digital coins issued by the Central Bank”, said.

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