Bank of Mexico Plans to Launch Digital Currency by 2024

https://www.wsj.com/articles/bank-of-mexico-plans-to-launch-digital-currency-by-2024-11640896506

by sahin • 5 years ago

4 1 5 years ago

pezzana• 5 years ago

The central bank considers it important “to use these new technologies and latest-generation payments infrastructure as valuable options to advance financial inclusion in the country,” the administration of President Andrés Manuel López Obrador said in a tweet late Wednesday.

Inclusion may be a consideration, but I suspect the real motivation is to allow the Bank of Mexico to more directly manipulate the real economy by disintermediating private banks. Instead of private banks holding an account at the Bank of Mexico with the private sector holding accounts at a private bank, the private sector would hold its money in a token created by the central bank. Private banks would then become custodians of the token because the average person is incapable of managing cryptographic keys.

To "inject" money into the economy, the central bank need only issue more tokens and credit them to each citizen directly. This avoids the many plumbing issues of government transfers we witnessed during 2020-2021.

In other words, CBDCs are a necessary development along the path to Universal Basic Income.

Bank of Mexico Plans to Launch Digital Currency by 2024

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