Last Updated: 3 July 2022
Mexican politician Indira Kempis has introduced a bill that would make bitcoin legal tender in the country. The aim is to increase the financial inclusion of Mexican citizens. However, Mexico’s central bank opposes the introduction of bitcoin into the country’s financial system.
Currently, a large part of the population is struggling to access financial products and related education. In April this year, during the Bitcoin Conference in Miami, Kempis already announced that it was working on this legislation.
— Indira Kempis de I. (@IndiraKempis) July 2, 2022
Bitcoin and Mexican peso
With this new bill, Mexico could follow in the footsteps of El Salvador and the Central African Republic, both of which have accepted bitcoin as legal tender. Senator Kempis’ initiative amends the current monetary law, in which only the peso is legal tender. The proposal literally (okay, not literally, since it was translated into Dutch) states that bitcoin can help improve the financial literacy of many citizens.
“It is reformed by adding to Article 2 of the Monetary Law of the United Mexican States and reads as follows: Article 2 Bitcoin (BTC) will be considered a legal tender in the Mexican Republic.”
Lack of financial inclusion
The proposal states that Mexico has less financial inclusion compared to neighbouring countries and that its citizens have little knowledge of how to manage their finances. According to the proposal, 56% of the Mexican population still does not have access to a bank account, which means that more than 67 million people still do not have access to the most basic financial instruments.
In the same vein, 68% of citizens do not have access to financial education, leaving most Mexicans seemingly unable to make informed decisions about savings, mortgages, or how to deal with credit.
Central bank cryptocurrency preferred
However, the bill proposed by Senator Kempis goes against the course taken by the government and the central bank of Mexico. In January, the central bank announced that it was working on the creation of a digital peso, the central bank’s own digital currency (CBDC). It is expected to be put into circulation by 2024 as a way to help Mexicans with their financial inclusion problems.
Victoria Rodriguez, the central bank’s president, said the new sovereign digital currency will introduce more citizens to banking.
“The digital currency aims to generate means of payment focused on financial inclusion, expand options for fast, secure, efficient, and interoperable payments in the economy and implement additional functionalities to the (existing) means of payment, such as automation mechanisms, programmability, and innovation.”
Preferably no bitcoin bank in Mexico
In addition, Mexico’s finance minister, Arturo Herrera, said in June that the use of cryptocurrencies was prohibited within the Mexican financial system, noting that the ban was unlikely to change in the short term. The move was announced after Ricardo Salinas Pliego, one of the richest men in Mexico, said he was working to make Banco Azteca the first bank to accept bitcoin in the country.