Claudia Sheinbaum’s Blitzkrieg War on Cash

Governments in Mexico have been trying to replace cash with digital payment alternatives for over a decade, and have largely failed. Until now… 

President Claudia Sheinbaum is on a mission to reduce cash use in Mexico, until now one of the world’s most cash-friendly countries, in the shortest possible window of time. Speaking at the recent 89th Banking Convention in Cancún, on March 19, she unveiled plans to eliminate the use of cash in key strategic sectors, beginning with gas stations and toll booths.

“Our goal this year is to make digital payments for gasoline and tolls mandatory,” the president said. “This will allow us to move forward with the digitization of the country through other schemes.”

Shienbaum praised recent improvements to the so-called “CoDi” system which can now be accessed through cell phones with zero commissions. CoDi (Cobro Digital) is a free, real-time digital payment platform developed by the Bank of Mexico, or Banxico, that has drawn comparisons with Pix, Brazil’s hugely popular instant payments system that has managed to enrage (and terrify) both Wall Street and Silicon Valley, and by extension, Donald Trump.

Other speakers at the event included former Canadian Prime Minister Justin Trudeau, who spoke about “Global Leadership and Transformation” as well as representatives of Mexico’s biggest banks, BBVA, Santander, HSBC, Scotiabank and Banorte. Also in attendance were Ryan McInerney, CEO of Visa, and Tim Murphy, Vice Chair of Mastercard.

Needless to say, eliminating cash payments from gas stations and toll booths in the next nine months is a tall order for a country where cash is used for roughly 80% of all transactions, making it arguably the G20’s most cash-dependent economy. Governments in Mexico have been trying to replace cash with digital payment alternatives for over a decade, to little avail.

But the banking sector, dominated by foreign lenders like BBVA, Santander and Scotiabank, continues to lobby for digitisation policies to reduce the use of cash, especially payments for public services. As we have discussed many times before, the move towards digital payments systems, particularly central bank digital currencies (CBDCs), is being pushed globally by organisations like the IMF, the WEF and the Bank for International Settlements (BIS).

As readers may recall, it was the Mexican central banker Agustin Carstens who, in his former role as chairman of the BIS, famously explained, with disarming candour, why central banks are so determined to introduce CBDCs across the world (spoiler alert: it’s all about control):

“We don’t know who’s using a $100 bill today and we don’t know who’s using a 1,000 peso bill today. The key difference with the CBDC is the central bank will have absolute control [over] the rules and regulations that will determine the use of that expression of central bank liability, and also we will have the technology to enforce that.”

Agustín Carstens, general manager of the Bank for International Settlements—the central bank of central banks—admits that CBDC will grant central bankers "absolute control" over how it can be used, and the technology to be able to centrally enforce that.

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In an interview with Bloomberg, the head of the Mexican Banking Association, (ABM), Emilio Romano, said Mexico’s central bank is preparing to publish protocols to drive the adoption of payments sent by mobile phones.” One of the reasons these changes are being pursued, he said, is that in Mexico “roughly 85% of small transactions are done in cash”.

This, according to the bank lobbyist, is largely due to “Mexicans not trusting their government and seeking to avoid taxation.” Which is one interpretation. Most times I ask Mexicans why they use cash so much, they tell me it’s because they don’t trust the banks. This is perhaps no surprise given the number of systemic banking crises the country has suffered, most recently in 1982 and 1994.

President Sheinbaum provided more details of her government’s anti-cash agenda in yesterday’s morning press conference, explaining that the ultimate goal is to transform the way transactions are carried out in the country. The plan is structured around three main axes: digitising payments, incorporating those who work in the informal sector into the financial system, and expanding access to credit for micro and small enterprises.

Sheinbaum cited China and Brazil as examples to follow. Both BRICS members have significantly reduced the use of cash over the past decade or so. But they have done so gradually whereas Sheinbaum wants to do it at breakneck speed.

While it may be necessary to try to downsize Mexico’s informal economy, this is not the way to go about doing it, explains Alejandro Gómez Tamez, a professor of economic development at the Tec de Monterrey, in a brief video. Forcing digital payments on a country where eight out of ten transactions are still made in cash “is a path not to modernisation but to mass exclusion”:

“Today eight out of ten transactions in Mexico continue to be made using cash, according to the Banking Association and international ranking for 2025-6. Cash is anonymous while digital alternatives reveal where, when and by whom payments are made.

But Mexico is no Scandinavia. Here the informal economy represents 25.4% of GDP, according to government estimates from 2024… And it encompasses roughly 55% of the working population — more than 32 million people.

So, what happens to the peasant farmer who sells his products directly to market? Or the small corner shop or mechanic who is paid exclusively in cash because he doesn’t have a bank account? And what about the areas where mobile connections are barely existent?

We are facing an accelerated transformation right at a time when events in the Middle East are pushing energy prices higher and the government wants to protect public finances. The message is clear: if you are not inside the digital system, you are increasingly out of the game.

By forcing payments to be digitised in essential sectors at such a rapid pace, Sheinbaum risks ignoring the structural reality of Mexico’s payments system, notes Gómez Tamez in a more in-depth article:

Today, cash represents about 70% of transactions among the banked population and up to 88% among those who are not. For purchases under 500 pesos (around $20), more than 85% of Mexicans use cash as their main means of payment. So it is not a question of resistance to change, but of the real conditions of the Mexican economy…

[M]illions of people operate outside the formal financial system, not by choice, but because the system itself does not offer them viable access conditions. Added to this is a persistent digital divide: four out of ten people in rural areas do not have access to the internet, which structurally limits the use of digital payments.

In this environment, eliminating cash in essential services such as gasoline and toll booths implies direct exclusion. It implies assuming that all Mexicans have a bank account, internet access, functional mobile devices and sufficient digital skills. This could not be further from the truth.

Sheinbaum has had a clear technocratic bent since even before entering politics. As we noted on the occasion of her historic election as president of Mexico, in June 2024, a key difference between her and her predecessor and mentor, Andrés Manuel López Obrador, is that whereas “AMLO is very much an old school Mexican politician with nationalist sensibilities, Sheinbaum appears to be more of a technocrat with globalist leanings”:

Before entering politics, she received a grant from the Rockefeller Foundation, one of the world’s longest-standing proponents of technocracy. During her time as mayor of Mexico City, her administration also received funding from George Soros’ Open Society Foundation and Bloomberg Philanthropies.

In January, Todd Martinez, director of the sovereign debt group at Fitch Ratings, remarked in a seminar broadcast to investors that while “Sheinbaum does come from the left-wing Morena party, she seems like more of a technocratic figure.” And technocrats can apparently be trusted — at least by the investor class. Interestingly, the word “technocratic,” denoting a system of governance based on technical approaches, is often used pejoratively by AMLO to refer to the ultra-neoliberal administrations that preceded him.

Sheinbaum’s proposed crackdown on cash dovetails with her government’s efforts to require a biometric ID for phone and internet service, as well as other areas like healthcare, banking, and school enrolment, reports the Mexico-based journalist Derrick Bronze:

In July 2025, several new laws took effect in Mexico that coerce the population into registering for a biometric program required to access many services. Known as the Biometric CURP (for Clave Única de Registro de Población or Unique Population Registry Code), the new laws require users to submit a photograph and scan a QR code that embeds biometric data, including fingerprint and iris scans.

The Mexican government claims these new laws aim to combat organized crime, drug trafficking, and aid with the search for missing people. The government has also argued that controversial changes to the nation’s telecommunications laws are designed to bridge the so-called “digital divide,” referring to the limited access to internet and cellular service in rural areas compared to urban environments.

However, critics worry that the biometric CURP system will increase opportunities for government surveillance.

In September 2025, José Flores, director of the local digital rights group Red en Defensa de los Derechos Digitales (Network in Defense of Digital Rights) (R3D), released a “concept note” about the laws and the dangers they pose. The organization has filed lawsuits against the package of laws.

Many questions remain about whether the biometric CURP will actually be mandatory for daily life. President Claudia Sheinbaum has repeatedly stated that it is voluntary, and some media reports have claimed the same. However, Mexicans and expats living in Mexico have already begun receiving notices from cellphone providers reminding them of the June 30 deadline. Users are told that their service will be ended if they fail to register their phone with their biometric CURP.

Digital ID systems are being rolled out in dozens of countries around the world, often unbeknown to the local population. They are viewed as a necessary prerequisite for the CBDCs being researched, developed, and in many cases piloted, by an estimated 90% of the world’s central banks, as the BIS pointed out in a 2021 report on CBDCs.

In a recent speech to the European Parliament, the German economist Richard Werner said that what makes CBDCs so different, and potentially so dangerous, is their centralising aspects, calling them the “biggest upheaval” in our monetary system in more than 300 years:

They want to move us away from what we’ve had so far, which is decentralised banks and decentralised bank money creation and decentralised digital money, to centralised money. That is what this is about. And when you think about that…, the centralisation of power into fewer hands is not a good trend.

Fascism was about the concentration of power. Communism was about the concentration of power. Any dictatorship wants to concentrate power.

Now, what’s the justification for all this? They will come up with stories but… in our day and age where we live, the politics is not convincing because actually the opposite should happen. We claim to be fans of democracy. That means equal rights for people, participation of people in the decision-making process, not one-way diktats from above by central planners…

In order to have democracy, economic success and prosperity, we need decentralisation. The principle of decentralisation is also known as the principle of subsidiarity, which is officially subscribed to where we are, Brussels, but is of course in reality ignored almost all the time.

[Subsidiarity] is about delegating power and decision making to the lowest possible level wherever possible. It’s been shown that any organisation involving humans will be more successful if you follow that principle, because it works. People on the ground, at the front line, whatever it may be, can react quickly. Not only will the decisions be better and more effective but also people will be more motivated.

Later on in the video, Werner explores the potential implications of programmable money as well as central banks’ bone-chilling plans to tokenise all assets, including the earth’s “natural” assets — “the air we breath, the water we drink”. He also cites the three main obstacles to the implementation of CBDCs identified by McKinsey:

1. Technical challenges, e.g. internet connection…
2. “A substantiated market value proposition has yet to be documented” — in other words, says Werner, there is no actual benefit to all of this for ordinary people.
3. “Trust remains a hurdle for a meaningful share of citizens and system participants to accept this, who question the motives behind CBDCs, often suspecting governments of aiming to monitor or restrict financial activity”.

Which brings us back to Claudia Sheinbaum’s proposal to eliminate all cash payments from gas stations and toll booths — in the space of just nine months, in a country where 80% of transactions are in cash. It is unlikely to go down well, even in a country where the government enjoys broad public support.

Most Mexicans depend on cash to participate in the economy, notes Goméz Tamez: “Eliminating it, or proscribing its use in key spaces, is tantamount to restricting their ability to transact.”