Central bank plans to release digital currency by 2024

Mexicans will be able to use a digital currency issued by the central bank later this decade, the federal government said on Wednesday.

President López Obrador’s office said in a Twitter post that the Bank of Mexico (Banxico) has announced that it will put its own digital currency into circulation by 2024.

However, sources from Banxico cited by the newspaper Milenio said the bank had not released any documents on the matter.

The president’s office said the central bank considers “new technologies and advanced payment infrastructure” to be “of the utmost importance” because of their ability to “advance financial inclusion”.

According to the financial website Investopedia, a central bank digital currency, or CBDC, is a virtual form of fiat money – a government-issued currency that is not backed by a physical commodity such as gold or silver. silver.

“A CBDC is an electronic record or digital token of a country’s official currency. As such, it is issued and regulated by the country’s monetary authority or central bank, ”Investopedia said.

“… CBDCs can simplify the implementation of monetary and fiscal policy and promote financial inclusion in an economy by integrating the unbanked into the financial system. “

The Bahamas and Nigeria are the only countries to have already launched CBDCs, but other countries are expected to follow suit in the years to come.

Banxico’s CBDC plans come just two months after the launch of a blockchain-based currency – the hoozie – that can be used in the Guadalajara metropolitan area.

The world’s best-known blockchain-based currency, Bitcoin, and other cryptocurrencies are not legal tender in Mexico, but recent survey shows just over 12% of Mexican adults have invested there. .

Earlier this month, Elektra became the first retail chain in Mexico to accept bitcoin. Its billionaire owner, Ricardo Salinas, is a Bitcoin enthusiast. He indicated his support for the CBDC plan by responding to the government’s Twitter message with a smiley emoji.

With reports from Milenio

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