Introduction to the New Coins and Their Production
The Casa de Moneda de México (CMM) and Banco de México (Banxico) are preparing for the production of new, lower-cost coins with environmental criteria. This initiative comes as the federal government aims to advance digitalization in the economy and reduce cash usage.
Current Cash Circulation in Mexico
Approximately 3.3 trillion pesos in bills and coins circulate daily across Mexico, a 200% increase from a decade ago. This demonstrates the high demand for cash despite growing financial system digitization.
Sustainable Coin Production and Cost Reduction
The Institutional Program of Casa de Moneda de México 2025-2030 outlines the goal of transitioning to producing one, two, and five peso coins made from steel cores coated with bronze, replacing the current bronze-aluminum alloy starting in 2025.
- This change aligns Mexico with global trends, as countries like Canada, the European Central Bank, and eurozone national central banks adopt steel-coated coins.
- The shift to steel-coated coins is expected to decrease production costs by 300 to 400 million pesos, primarily in metal acquisition.
ESG Criteria and Sustainable Practices
The CMM emphasizes that implementing innovative solutions, such as steel-coated coins, supports an economy circular, reduces carbon footprints, minimizes water usage and waste, and promotes responsible supply chain practices.
Cash Usage Amidst Digitalization
Despite predictions that electronic transactions will triple globally by 2030 (61% growth, surpassing 3 trillion transactions), cash is expected to remain the dominant payment method for retail transactions, especially in developing economies with high vulnerable populations, limited financial infrastructure, and low financial penetration.
- Mexico anticipates continued cash demand, with bills and coins outpacing other payment methods due to safety concerns, expanding informal economy, increased remittances from the US, and low financial penetration (only 49% of adults have bank accounts).
Key Questions and Answers
- What are the new coins made of? The new 1, 2, and 5 peso coins will be made from steel cores coated with bronze.
- Why are these changes being made? The CMM and Banxico aim to reduce production costs and align with global sustainability trends.
- How will this affect cash usage in Mexico? Cash demand is expected to continue growing, but digitalization will also increase, shaping the future of payment methods.
