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Mexico to Consider CBDC Legislation as Senator Promises Bitcoin Adoption

UTC by Ibukun Ogundare · 3 min read
Mexico to Consider CBDC Legislation as Senator Promises Bitcoin Adoption
Photo: Unsplash

The bill’s objectives are per those of countries like Honduras that have displayed more acceptance of CBDC than Bitcoin.

Mexican senator for the State of Nuevo Leon Indira Kempis has put forward a bill proposing the acceptance of CBDC in Mexico. Contrary to Indira Kempis’ plans in February, the bill mentions CBDC only, not Bitcoin or altcoins. The stateswoman was said to be planning to help make Bitcoin a medium of exchange in the country. However, there was the improbability of proposing it then, considering President Andres Manuel Lopez Obrador’s lack of interest in accepting Bitcoin as a valid currency. At The time, Indira Kempis opined:

“We need bitcoin to be legal tender in Mexico because if it is not so, if we do not make that decision as El Salvador did, it is very difficult to take action.”

The draft Kempis passed about two months after the statement focused on CBDCs. In the draft decree amending article 2 of Mexico’s monetary law, she proposed that “only the central bank” could issue a digital currency for the country.

According to a translated version of the bill, the amendment primarily presents a “digital currency of the central bank” among Mexican banknotes and approved metallic coins as the “only circulating currencies and virtual assets.” The bill also allows the Ministry of Finance and Public Credit to replace alloys with coin-based currencies. Thereby, permitting the Ministry to publish an official journal, if the replaced alloys are in circulation.

The bill’s objectives are per those of countries like Honduras that have displayed more acceptance of CBDC than Bitcoin. It also follows through with the 2024 plan Mexico has for a CBDC adoption.

Why Does Mexico Need CBDC?

Indira Kempis’s proposal for Mexico to adopt CBDC is puzzling. She was recently assertive about adopting the world’s largest cryptocurrency at the Bitcoin Conference 2022. Oddly, the bill which does not, in any way, favor Bitcoin is dated the 6th of April, a day before her statement at the Bitcoin Conference. It is unclear if there will be an amendment or if the senator will pass another.

Indira Kempis’ draft explains that the operations of financial institutions require the intervention of the Mexican State. The government ought to make laws and generate policies that promote development and economic growth. These measures will ensure the stability of the fiscal system and the protection of users. The bill describes CBDC as necessary for human rights in Mexico. The state intervention in the currency adoption is intrinsic to the humanitarian reassurance the citizens of Mexico need. In addition, the draft highlights the need for Mexico to protect users from malicious service providers.

In September, El Salvador became the first country to accept Bitcoin as a means of exchange. Since then, no country has, although smaller regions are testing the waters. Prospera, a jurisdiction in Honduras, accepts Bitcoin while floating Bitcoin bonds to other districts and organizations. Its residents avoid capital gains taxes on Bitcoin. Also, in Madeira, Portugal, Bitcoin was made de facto means-of-exchange. Its citizens can now pay taxes with the cryptocurrency.

Indira Kempis proposed to define a monetary policy, one which Samson Mow interpreted as a Bitcoin law. Kempis also made arrangements for Samson Mow to have a meeting with Mexico’s president to discuss Bitcoin as a valid currency in the country.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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