The central bank governor of Mexico, Victoria Rodriguez, announced the plans to roll out a CBDC by 2025.
Victoria announced that the new government-backed digital currency will allow more people to participate in formal banking activities.
“The digital currency seeks to generate means of payments aimed at financial inclusion, expand options for fast, secure, efficient, and interoperable payments in the economy, and implement complementary functionalities to the (existing) means of payment, such as automation mechanisms, programmability, and innovation.”
Victoria Rodriguez, the central bank governor
She added that the central bank-issued digital currency will not replace normal physical notes and currency. But, the CBDC will help in the expansion of the utility of the currency.
Mexico and its plans for CBDC
The current announcement is on a delayed end compared to the previous announcement, where the Central Bank announced that its CBDC would be launched in 2024.
The announcement also signifies that the government and the central bank have become more welcoming of digital currencies and the decision to regulate them. The central bank has been in discussion since last year to evaluate the barricades to launching a CBDC.
Mexican President Manuel López had earlier denied the possibility of accepting cryptocurrency and bitcoin in general as legal tender. The officials stated that even though they can be exchanged, they don’t fulfill the functions of money.
Can Crypto and CBDC go hand in hand?
Even though the governments try to regulate digital currency and deploy CBDC, they are both very different. CBDCs generally kill the entire concept of cryptocurrencies and their decentralized nature.
Governments claim that the entire advantage of CBDCs is that it’s backed by the government. CBDCs are generally rolled out by the countries to stay on trend with the growing digital currency adoption.
The Bank of Mexico is working closely to deploy its CBDC. The road to that is definitely bumpy but might be worth the effort.