Mexican peso and corruption to be eliminated with blockchain

Blockchain technology is along with artificial intelligence, robotics, automated vehicles and other innovations the motor behind the Fourth Industrial Revolution, but for the people of Mexico, whose overwhelming majority is fed up with corruption, it just may bring hope that such unscrupulous behaviour can finally be eradicated.

Mexico is the most corrupt country among the 35 country members of the Organisation for Economic Cooperation and Development (OECD), and fourth in impunity worldwide. Corruption scandals have smeared all levels of government including Mexican President Enrique Peña Nieto, who has been accused of accepting multimillion-dollar bribes in exchange for granting government contracts and for receiving hundreds of millions of dollars from drug cartels. His approval rating has plummeted to below 10%.

Coincierge Club, a US-based technology firm, has announced that, with networking assistance from Mexican government agency ProMexico, it has partnered with other private sector investors to launch an ambitious pilot programme in the border city of Mexicali within three months to eliminate the Mexican peso and radically reduce corruption. It clarifies, however, that the main objective of the project is to promote educational and economic development across the country.

The firm’s CEO, Darryll DiPietro, told Coin Rivet in an exclusive interview that he believes the project will soon be extended to other cities in the northwestern Mexican state of Baja California, where Mexicali is located, and that within two years it may be operational countrywide. He also believes that by then the peso will have been completely eliminated.

“The project will then be taken to Ensenada and then extended countrywide. We expect the program to be implemented throughout the whole country in about two years” he said.

“Our vision is to connect Mexico and United States via smart city projects beginning with a very relevant corridor between Louisiana, all the way down to Mexicali, Baja California,” he said. Mexico is currently ranked as the 8th largest world wide economy.

“By implementing blockchain technology into all government services and activities and a cryptocurrency to substitute the peso and thus reach complete transparency, corruption will as a result be eliminated,” he added. “Nobody will be able to launder money and you won’t ever be able to buy a million dollars of cocaine without the whole world knowing.”

Mexico will hold presidential elections in July. All candidates have focused their campaigns mainly on fighting corruption. Right wing candidate, Ricardo Anaya, who is trailing in second place with about 29% of voter preference behind leftist candidate Andres Manuel Lopez Obrador (46%), suggested bringing blockchain technology into his government to stop public officials from committing fraud, asking for bribes, laundering ill-gotten money and other criminal activities.

DiPietro said not even the President knew of the project at first, “but by now everybody knows … but nobody will be able to stop it,” he said after admitting they will encounter obstacles and resistance. Coin Rivet contacted ProMexico’s main office in Mexico City but the head of the institution, Pedro Carreño, was not available for comment. And David Garza, a spokesperson for ProMexico, was not able to confirm nor deny the existence of the project and said he would get back to Coin Rivet with more information.

The ProMexico delegate in Phoenix, Eduardo Gonzalez denied any such project existed, but his refusal to confirm the plan is commonplace in a country where government officials are bound by secrecy and fearful of losing their jobs. However, a few days after reading this article, Gonzalez reversed his denial saying “we are interested in working with Darryll in helping him reach the right contacts so he can explore options that we hope will result in the establishment of a company in Mexico.”

Mexicali’s government Director of Economic Development Promotion, Jose Luis Gonzalez, said they have no information regarding the project, but explained that they have no reason to know “unless they approach us to ask for some kind of official assistance.”

He went on to say that ProMexico very rarely speaks to media about foreign investor’s plans in Mexico, but since the government agency is focused on increasing trust in Mexico as a means to attract more business for the country, it’s not at all far-fetched that they would be highly interested in blockchain as a vehicle to provide international business people with the transparency they may be used to in other countries.

The World Bank recently published a report saying that, “cryptocurrency and blockchain could help prevent fraud and corruption, and reduce the costs of enforcement, thanks to easily accessible information and faster cross-checks, and help supervise implementation and monitor efficiency and effectiveness of spending, increasing development impact.”

* This story has been updated 1 June 2018.