Banxico plans to put its digital currency into circulation in 2024

December 27, 2021 | 05:00

adoption Central bank digital currencies (CBDC, for its English acronym) is also part of the Banco de México . Agenda Follow Favorite Which he hopes to put into circulation by the end of 2024.

Nearly two years after the onset of the COVID-19 pandemic, elements to spur digital payments have emerged, leading to the emergence of CBDC. Based on this phenomenon, central banks launched their plans to diversify payment methods between countries people and companies.

Central Bank Digital Currency is the digital form of a country’s fiat currency which is also an entitlement of the Central Bank. Instead of printing money, the central bank issues coins or electronic accounts backed by the full faith and credit of the government, according to the Atlantic Council.

In the case of Mexico, Banxico handled the issue with moderation unlike other central banks, but the deputy governor Jonathan Heath It is estimated that at the end of 2024, the Mexican CBDC will be able to enter operations.

We are working on a project, we even have a timeline where we think maybe by the end of 2024 at the latest, we should make it work well (CBDC),

Heath said in a video conference hosted by S&P Dow Jones Indices

Read also: Cryptocurrencies are here to stay: WEF

Paper and money will continue to dominate

Heath noted the impact of SPEI, a platform that “not many countries have and works well” and that he considers that they already have an approach to what digital currency.

However, the arrival of digital currency will not automatically replace banknotes and coins, given the high rate of informality and low financial inclusion in Mexico.

We will be using paper money as the predominant payment at the national level for a long time, so we do not want to lose sight of these technological developments; We are there, we will do it and we will work,

Deputy Governor raised

Previously, the governor of Banxico, Alejandro Diaz de Leon, said who – which financial institutions And technological development can be a “cornerstone” for the adoption of CBDCs.

Conventional financial institutions can play a critical role in promoting modern financial infrastructure. New technologies and payments infrastructure are valuable options for enhancing financial inclusion and could be the cornerstones of the best forms of digital money and digital currencies in central banks,

Diaz de Leon said a few months ago at the IMF forum

global situation

CBDC projects have seen the light in some economies and are being piloted in others, according to a study of more than 85 countries implemented by it. Atlantic Council.

In total, digital central bank currencies are spread across nine economies, in the Bahamas, the sand dollar was launched in 2020.

For its part, the Eastern Caribbean Central Bank (ECCB) traded DCash in March of this year in economies such as Antigua and Barbuda, Saint Kitts and Nevis, Saint Lucia and Grenada.

In August of this year DCash approved a circular in Saint Vincent and the Grenadines; In December it began to be used in Dominica and Montserrat.

Nigeria is added to this list of Caribbean countries, which in October 2021 launched its own CBDC under the name e-Naira.

According to the report, 14 economies are experimenting with digital central bank currencies; At 16 they are in the development stage; 40 in studies; 7 On hiatus, two projects were canceled.

Among the 14 beta trials, China and South Korea are set to be the next two economies to launch their entire digital currency.

The numbers contrast with what was imagined a few months ago, because in May 2020, only 35 countries were considering the option of implementing a central bank digital currency, and there are currently 87 countries – representing more than 90% of global GDP – that have already launched their projects.

Moreover, among the four largest central banks such as the European Central Bank, Japan, the United Kingdom and the United States, the latter shows the largest lag.

Without new standards and international coordination, the financial system could face a major interoperability problem in the future,

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