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Could Mexico be the next El Salvador?

Photo of: Joseph Stone
by Joseph Stone

Since El Salvador and its president, Nayib Bukele, made Bitcoin a legal tender, more and more people are starting to hope that their country will follow suit. Faced with growing pressure to adopt Bitcoin, Mexican regulators are trying to put the brakes on, but for how much longer?

Tempers are flaring in Mexico after billionaire Ricardo Salinas Pliego announced he would do everything he could to make his business conglomerate’s bank, Banco Azteca, the first bank in Mexico to accept Bitcoin.

It was a patchwork of virtually everything Mexico has of financial authorities/regulators and central bankers that met in a hurry this Monday, June 28, to reaffirm their distrust (hostility?) towards the king of cryptos:

“The financial authorities reiterate their warning (…) about the risks inherent in the use of so-called ‘digital assets’ as instruments of exchange, as a store of value or as any other form of investment (…) The country’s financial institutions are not allowed to carry out and offer to the public operations with digital assets, such as bitcoin, ether, XRP and others, in order to maintain a healthy distance between them and the financial system. “

The message is clear: the incumbent holders of the Mexican peso issue do not want competition from Bitcoin or any other crypto. When you know the strong dependence of the national fiat currency with the imperialist US dollar, this remains quite paradoxical.

The question will remain, then, how long will the Mexican financial authorities hold out if politicians and significant economic players in the country do without their “advice” (threats?). It will be even harder if other Latin American countries, in addition to El Salvador, lead the way and take the step of making Bitcoin a legal tender.

As a reminder, countries like Panama and Paraguay are both in the process of considering following suit.