Mexicans are shifting their point of interest from banks to cryptocurrency.
Mexico already has a crypto regulation known as Fintech law.
Reports noted that around 2.5% of Mexico's population holds Bitcoin as of 2021.
In comparison to financial institutions is growing significantly with every passing day.
A recent report suggests that Mexicans are finding it hard to trust existing financial institutions aka BANKS. The growing challenges of sending remittances and the lack of access to financial institutions services for several Mexicans have resulted in a loss of trust in banks.
Though the country has established its own crypto legislation based on the present challenges and concerns. And this is something that is successfully helping them to manage their financial transactions.
Meanwhile, the Mexican government in its crypto regulation, Fintech Law, does not recognize bitcoin or cryptocurrency as legal tender or as means of payment, but at the same time, its use is not illegal. However, if we look at the stats, cryptocurrencies are the primary source of remittances for Mexicans.
Due to several difficulties in sending money via traditional banks, Mexicans find cryptocurrencies as the only way to overcome all the barriers to transferring remittances. This could be the primary reason why Mexicans avoid banking services as their first alternative.
The second reason is the lack of access to the traditional financial system among Mexicans. As per a recent survey conducted by the Association of Mexican Banks, the traditional financial system is inaccessible to 53% of Mexico's population.
This drawback is once again becoming a significant factor among users losing trust in traditional banks and opting for cryptocurrency as their sole financial tool.
The Central Bank of Mexico announced in April 2022 that they are planning to launch the Central Bank Digital Currency (CBDC) in 2025 to increase the adoption of digital currency as well as financial institutions. The initiative also is expected to provide financial services access to other Mexicans as well.
However, several Mexican lawmakers are proposing drafts to make bitcoin and cryptocurrencies as their legal tender because one-third of Mexicans are already utilizing digital currency in buying their everyday essentials.
A recent viral video from Brazil which was posted on Twitter depicted that a Mexican boy bought fruits using bitcoin as legal cash. This indicates that if the government adopts appropriate regulations related to cryptocurrency, the country will undoubtedly become a hotspot for crypto usage.
What do you think, will Mexican banks be able to regain their users' trust, or will the government release a revised crypto regulation? Share your views in the comment section below.
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