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Will the peso become a digital currency?

It is only a question of time before Mexico will have a digital peso, according to Coin Desk yesterday. The plan is underway to create the Peso Digital of Mexico.

Las Vegas Casino Installs Bitcoin ATM
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Luis Daniel Beltrán, Peso Digital head and chief executive of Microbit, told CoinDesk that the plan for a digital peso in Mexico will advance the potential of bitcoin technology. This will spur other countries to have their own blockchain. If it succeeds, then it will become a trusted system and one of transparency.

There are far-reaching implications for this plan that will address the country’s economic and political issues of the remittance market and tax process for its unaccountable population.

The process that Beltran proposes for Mexico would be to produce a digital version of Mexico’s fiat currency with the block chain technology utilized in the bitcoin model. The block chain would be controlled by the Mexican central bank. There would be three chains under control of the Mexican central bank which would provide for the control and transparency of Peso Digital.

The block chain would be one of peer-to-peer currency as is the bitcoin model. It could provide irreversible transactions of peso between two people and without the over view of a central bank system

The second block chain would be for larger valued transactions and be part of the Bank of Mexico’s Interbank Electronic Payment System (SPEI). The SPEI system is digital and provides efficient and quick transfer of funds. Once it is placed on queue the transfer will take place within thirty seconds or less. It will be held securely on queue until the transfer can be made with funds listed online.

Beltran explains that this would give the advantage of cash distribution and round-the-clock transaction availability. He acknowledges that this process will encompass the most complex structure of the block chains. Each digital wallet could be linked to a user’s bank account or the SPEI address. This provides security and tracking accountability. Participants of the SPEI digital system are banks, pension funds, insurance companies and other financial institutions.

The third block chain would be linked for the tax process. It could have a private key from the FIEL (Firma Electronica Avanade) and provide an encrypted digital electronic signature for security.

Beltrán said: “Banco de México is already checked. We are now planning to go further with other institutions like SAT – IRS in the US – and other institutions in order to complete all of our goals. […] If the digital peso succeeds and it’s well implemented we could have an incredible transparency tool for management of resources.” A system of trust and transparency will be the ultimate goal.

Bitcoin has become lawful money in the state of California and Google has added it to its financial search engine.