The Tempting Promise of a Digital Peso

More than a year after the ambitious announcement, Mexico’s journey toward a central bank digital currency (CBDC) feels more like a meandering stroll than a swift sprint. Initially touted to launch by 2024, the greenlight on the digital peso seems to be stuck in the slow lane—a phase best described as the “We’re working on it” phase.

What’s in the Works?

Reports from local media reveal that the central bank, or Banxico as it’s affectionately known, is currently wrapping its mind around the legal, administrative, and technological needs to bring this digital dream into reality. The initial hopes of having a shiny new digital currency have turned into a classic case of waiting for a bus that seems perpetually delayed.

Setting the Stage for the Digital Revolution

Back in December 2021, the government expressed its lofty goals with a tweet claiming that the digital peso would usher in a new era of financial inclusion through “next-generation payment infrastructure.” But here we are, 2023, and Banxico is keeping its lips sealed on any specific launch date. Their recent statements hint that a budget is in the works, which could eventually lead to a more defined launch timeline. Possibly just a matter of budgeting, but hey, who doesn’t love a good financial forecast?

A Peek Under the Hood: The Development Phases

The project was supposed to roll out in phases:

• Phase One: Launch of the PagoCel platform, permitting users to transfer money via their mobile numbers.
• Phase Two: Enable financial institutions to issue security codes allowing digital currency transfers through the Interbank Electronic Payment System (SPEI).
• Phase Three: Making the digital currency accessible to those without bank accounts—a big step toward true financial inclusion.

It seems we’re still piecing together the first puzzle, and it’s yet to be seen whether the other pieces will fall into place.

A Crypto-Friendly Climate

Despite the holdups, the appetite for cryptocurrencies in Mexico has been simmering since early 2021 when statistics revealed that 40% of businesses were eager to explore blockchain and cryptocurrency. In a twist of fate, a Bitcoin ATM even found its way into the Senate building, much to the delight of crypto advocates and a few perplexed politicians.

Remittances: The Bright Spot

With remittances touching a staggering $5.3 billion between July 2021 and 2022, Mexico is no slouch when it comes to the global cash flow game. As the second-largest recipient of remittances worldwide, one can only hope that the CBDC will make those transactions smoother—think of it as a digital cherry on top of an already lucrative sundae.