Banxico, Mexico’s Central Bank, announced that the bank expects to complete the development of their digital currency, CBDC, in around three years. Victoria Rodríguez Ceja, the governor of Banxico, reported this before the Mexican Senate and added that the new currency should fulfill the three traits of money to create more financial inclusion.
Governor of Banxico Reports CBDC Advancements
Banxico gave a status update about its CBDC (the digital peso). The governor of Banxico, Victoria Rodríguez Ceja, informed that the bank had a rough approximation of the time it will take to complete and launch the currency. During the bank’s visit to the Senate to render its annual report, Rodríguez Ceja stated:
The final operation of the facility will be completed in three years, according to our estimates.
The governor also stated this currency could be used as a means of exchange, as a unit of account, and as a store of value — three traits of money. In December 2021 the development of the currency was revealed by the governor. The governor also discussed the potential functions such a currency might have before the Senate.
Financial inclusion and payments
Rodríguez Ceja compared cryptocurrencies and the CBDC that is in process of development, explaining the differences between the two. According to her, the digital currency will become part of the country’s monetary base and is supported by the central banks. She warned, however, that cryptocurrencies are not a good idea.
Unsupported assets such as crypto assets do not have legal tender currency status. Because of their volatility, individuals can take a chance by having access to these assets.
Banxico believes that the digital currency will be a useful tool for increasing financial inclusion in the bank system. The currency will also be used to make payments. Rodríguez Ceja stated that this new currency does not have the goal of substituting the current system, but will serve as a tool to provide more opportunities to the underserved.
According to the World Bank Mexico is far behind other countries in terms of financial inclusion. In 2021, only 37% adults had access to a banking account. The same goes for digital payments. Only 32% of respondents have received or made digital payments. Mexico is now at an advantage compared with other countries within the region. This is where the digital peso will help to change the situation. Commercial banks are also offering to assist in designing the currency so that it can achieve its objectives.
What do you think about the statements of Victoria Rodríguez Ceja about the digital peso? Leave a comment below.
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