Wednesday, August 17, 2022

Mexico’s CBDC to Arrive Around 2025, Here’s What We Know

HometechMexico’s CBDC to Arrive Around 2025, Here’s What We Know

Mexico’s central bank digital currency (CBDC) is likely to come into circulation by 2025. The development has been confirmed by Victoria Rodriguez Ceja, the Governor of the Bank of Mexico (Banxico) before the Mexican Senate. The country is aiming at financial inclusion for its citizens with its CBDC. Those Mexican residents who are not part of the nation’s banks and other financial plans could join it via the CBDC. Mexico is planning to add new automation techniques that will speed-up payment procedures via its CBDC as well.

“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,” Rodriguez said.

A CBDC is built on a blockchain network, is virtual in nature, and is regulated by the government.

Several nations like India, Jamaica, Japan, and Sweden among others, are working on creating their respective CBDCs.

Meanwhile, the Bank of Mexico is also looking to legalise the crypto industry after framing a solid legal framework around it.

The central bank, along with other relevant groups in Mexico are conducting researches around a working crypto framework.

Japan has also decided to take a significant amount of time to study about the CBDC, crypto, and blockchain sectors.

Following Sweden’s detail-oriented approach to digital currencies, Japan is expected to reach a decision on the roll out of Digital Yen by 2026. As part of its research on CBDC, Japan’s main aim is to ensure that it aligns properly with the country’s existing financial and economic infrastructure.

While some nations are taking a definitive lead in CBDC development, others are waiting to follow global suit.

Earlier this month, Mwigulu Nchemba, the Minister of Finance of Tanzania, along with its central bank governor, Florens Luoga, asked for global clarity on crypto during a virtual summit organised by the Bank of Tanzania and the [International Monetary Fund (IMF)](.

As per Nchemba, Tanzania is making some progress in the CBDC development but is awaiting a global stance on national digital currencies.