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Following El Salvador’s move to accept Bitcoin as legal tender, there have been numerous speculations on which country could be next. Amid the rumors, Mexico’s government has ruled out the possibility of following El Salvador’s footsteps.
Bitcoin is Not a Legal Tender
Yesterday, Mexican President Mexico Andrés Manuel López Obrador said at a press conference that the government won’t consider making Bitcoin a legal tender for now. Obrador explained in the press release that he believes Mexico should maintain the status quo when it comes to its financial space, and a move to the Bitcoin standard isn’t in line with that. The president stated that instead of making the Mexican financial industry more crypto-friendly, preventing tax evasion should be the government’s primary objective. Obrador argued that Mexico doesn’t need to make fundamental changes to its financial system for now. Mexico’s stance on Bitcoin adoption has been a topical issue since El Salvador accepted Bitcoin as a legal tender. In June, two Mexican lawmakers proposed a Bitcoin legislation bill. Eduardo Murat Hinojosa, a senior government official, said on Twitter at the time that he would be promoting a legal framework for Bitcoin and other cryptocurrencies in Mexico’s lower house. Indira Kempis Martínez, another lawmaker, added that the crypto legislation bill would put Mexico at the forefront of FinTech adoption. Interestingly, the seeming anti-crypto sentiment appears to be uniform among the top brass of Mexico’s government and financial industry. Also, in June, representatives from major financial regulators - including the National Banking and Securities Commission, the Bank of Mexico, and the Mexican finance ministry - issued a joint statement warning investors of the inherent risks of virtual assets. The statement added that financial institutions in Mexico aren’t authorized to carry out any digital asset-based transactions or offer them to the public.
El Salvador’s Blues Spread
Now that Mexico rejected Bitcoin legalization, there are suggestions that other Latin American countries would like to take up the mantle. However, the prospects aren’t so high, given that El Salvador’s adoption experiment itself has seen mixed responses so far. This week, CNBC reported that many Salvadorians don’t understand how Bitcoin operates. Even worse, the government’s official Chivo wallet has been beset with significant technical issues, leading to loss of funds from latency and other problems. The issues with Chivo might be due to a surge in adoption. President Nayibb Bukele tweeted last month that the wallet already had over 2.1 million users - more than the user base of any bank in the country. [coin_ticker symbol="BTC"]