The Mexican Mint (CMM) and the Bank of Mexico (Banxico) prepare the production of new coins at a lower cost and under environmental criteria, just when the federal government is preparing an initiative to advance the digitalization of the economy and, thereby, reduce the use of cash.
In the streets of the country Around 3.3 billion pesos in bills and coins circulate daily200% more than 10 years ago. This gives an idea of the high demand for cash in the country, despite the greater digitalization of the financial system.
The Institutional Program of the Mint of Mexico 2025-2030 raises the objective of moving to production of metallic coins one, two and five pesos based on bronze-coated steel cores, replacing the current bronze-aluminum alloy, starting in 2025.
According to the document published in the Official Gazette of the FederationIn this situation, Mexico would join the trend in the use of coated steel in the coins provided by various countries in the rest of the world.
The use of bronze-coated steel would mean a decrease in production costs of metallic currency of between 300 and 400 million pesos, mainly in the acquisition of the metal.
The CMM approach highlights that, for some of the mints around the world that implement coated steel, such as the Royal Canadian Mint, the European Central Bank and the national central banks of the euro zone, the development of these types of innovative solutions is essential to support a circular economycontribute to reducing the carbon footprint and promote responsible sourcing practices.
In this way, one of the elements that predominate in responsible coinage are the ESG criteria (Environment, Social and Governance, for its acronym in English), with the aim of investing in solutions that reduce the carbon footprint, reduce water use and waste, as well as minimize environmental impact.
“This is why one of CMM’s main challenges for the period 2025-2030 consists of moving in an orderly manner towards the use of bronze coated steel blanks in the process of minting legal tender, at least for the purposes indicated above, with a sustainable approach; that is, sustainable and environmentally responsible production, and with a gender perspective throughout the production chain in which the Entity intervenes.”
The CMM also points out in its program that will explore the feasibility of coining other denominations based on sustainable production and with a gender perspective, in addition to increasing the production of medals for institutional and private clients.
Cash will still be king
The CMM points out that various studies predict that economic transactions through electronic means will triple in 2030 around the world, with a growth of 61%, exceeding 3 billion transactions. The new structure of payment methods, with an increasingly clear focus on digitalization, will be configured according to the interaction and response of the financial systemcompanies, regulators, governments and consumers.
However, he use of cashalthough it has heterogeneous characteristics around the world, expected to continue to be the prevailing form of payment in retail payments, mainly in developing economies, where there is a high percentage of vulnerable groups, limited financial infrastructure and penetration.
“Therefore, it is expected that the demand for cash in Mexico continues to expandwhere the use of bills and coins prevails over other means of payment, which can largely be explained by precautionary reasons, expansion of the informal economy, greater remittances from the United States, as well as low financial penetration, since only 49% of the adult population has an account in financial institutions.
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