Banxico to Launch Cryptocurrency by 2024

Mexico’s Federal Government announced that Banxico plans to introduce its own digital currency by 2024, despite earlier statements that “virtual assets do not constitute legal tender in Mexico.”

“The Bank of Mexico (Banxico) reports that by 2024 it will have its own digital currency in circulation, considering these new technologies and the next-generation payment infrastructure are extremely important as options of great value to advance financial inclusion in the country,” reads a Tweet by the Mexican federal government.

Mexican investors have been seeking the introduction of cryptocurrencies to the Mexican Stock Exchange (BMV) for a long time, leading BMV’s General Director Jose-Oriol Bosch to work to obtain the necessary authorizations for their inclusion during the National Week of Financial Education (SNEF), as reported by MB. Bosch also highlighted that, “the market will grow and if the market grows we all win.”

Javier Martínez, Chief Product Officer, Bitso, told MBN that crypto-powered solutions will allow efficient, faster and cheaper cross-border payments. The development of these new technologies is a vital modernization, adding that cryptocurrencies can aid countries severely affected by inflation and capital control as a borderless means of exchange.

MBN reported that the Atlantic Council announced that there are only five countries with fully launched digital currencies and 15 that are currently developing pilot programs while assessing the possibility of introducing these new financial tools into their economies. Major economies like South Korea and Sweden are also exploring the possibility of introducing them, while their development in Mexico was a major concern as the country did not have a concrete plan until the latest government announcement.

The announcement also marks a turnaround in the Federal Government’s approach to this technology. “Virtual assets do not constitute legal tender in Mexico nor are they currencies under the current legal framework,” reads a Banxico press release dating June 28, 2021. “The country’s financial institutions are not authorized to carry out and offer to the public trading with virtual assets, such as Bitcoin, Ether, XRP and others in order to maintain a healthy distance between them and the financial system. Those who emit or offer these instruments will be responsible for the infractions to the regulations that this causes and they will be subject to applicable sanctions.”

The rise of cryptocurrencies has also created sustainable concerns, as Top Energy's CEO and Co-Founder Juan Ávila explains to MBN: statistically most of the required energy for their creation comes from fossil fuels. Ávila argues that the more cryptocurrencies continue to develop, a greater amount of fossil fuel consumption will follow.