A senator belonging to the Mexican Congress, Indira Kempis put forward a bill for introducing bitcoin as the country’s legal tender. The proposal was developed after taking into account the challenges that citizens of Mexico have to deal with in accessing education and financial products. However, the country’s central bank has been heavily opposed to integrating bitcoin into the Mexican financial system.
Making bitcoin legal tender
Latin America has seen rapid adoption of cryptocurrencies and Mexico is the latest country to join the crowd and consider what cryptocurrencies like bitcoin can offer. Senator Indira Kempis launched a new bill aimed at amending Mexico’s current monetary law for granting legal tender status to bitcoin. The bill stated that this could come in handy for changing the financial literacy of Mexicans.
The fact there is not the same level of financial education and inclusion in Mexico as that of other Latam countries is the basis of the proposal. It highlighted that almost 56% of the people in Mexico do not have a bank account, which means that basic financial instruments are not accessible to about 67 million people in the country.
Similarly, 68% of Mexican citizens are denied access to financial education, which prevents them from making well-informed decisions in terms of dealing with credit, mortgages, and savings.
Central Bank of Mexico
It should be noted that the bill goes up against the narrative of the Central Bank of Mexico and the government. The central bank had announced back in January that it was working on developing a digital peso, which would serve as its own central bank digital currency (CBDC). The bank further said that it expected to launch it by 2024 and it would promote financial inclusion in the country.
Arturo Herera, the Finance Minister of Mexico, had also stated in June that the Mexican financial system did not support the use of cryptocurrencies. As a matter of fact, it was prohibited to use crypto and also added that it was unlikely to change any time soon. The statement had been made in response to a report about one of the richest men in the country, Ricardo Salinas Pliego.
The report said that he was trying to make Banko Azteca, one of the banks in Mexico, to be the first one to accept bitcoin.
Other Latam countries
Mexico’s stance seems to be quite different from other countries in Latin America. Surveys have shown that crypto adoption has been quite high in these countries because they want to promote financial inclusion. Brazil has proven to be on top of the list, but there are others that have also taken them up.
As far as making Bitcoin legal tender is concerned, El Salvador made history when it did so last year. Most other countries are willing to incorporate cryptocurrencies in their financial system, but none have adopted them as legal tender, as the volatility of these digital assets makes that a risky move, as apparent with the turmoil in the market.