Mexico Moves Against Cash as Its Arbitration Docket Fills Up

Mexico runs on cash to a degree that surprises visitors and frustrates its own tax authorities. A bill now before Congress would begin to change that by compulsion rather than persuasion.

The Digital Economy Law for Digital and Electronic Payments was sent by President Claudia Sheinbaum and published in the parliamentary gazette on 8 September. An explainer published on Friday brought it back into the news.

What the Bill Would Do

The core mechanism is sectoral designation. After approval, the finance ministry would have fifteen working days to name the first sectors in which accepting digital payment becomes mandatory.

Sector regulators would then set their own timelines. That staged approach avoids a single national deadline that small businesses could not meet.

Public sector entities would be required to accept digital payments from the outset. That is the part with the clearest immediate effect on ordinary transactions.

The bill also brings the digital population registry into the financial system as a trust mechanism. The central bank gains new duties on digitalisation and financial inclusion.

What It Does Not Do

The law does not reform CoDi or DiMo, Mexico’s existing instant payment platforms. Coverage describing it as an overhaul of those systems is reading intent into a bill that contains no such provision.

It leans on infrastructure that already exists. The interbank payment system, the two platforms and high mobile phone penetration are treated as sufficient plumbing.

What is missing is uptake rather than capacity. CoDi in particular has been available for years without becoming habitual.

The bill’s answer to that is obligation. Where persuasion has not worked, acceptance becomes a condition of operating in a designated sector.

The Cash Problem

Mexico’s informal economy absorbs a large share of employment and a larger share of transactions. Cash is its medium and its shelter.

That has consequences beyond tax. Cash-intensive businesses are harder to lend to, because they generate no transaction record a bank can read.

Financial inclusion has improved without cash use falling proportionately. Account ownership has risen while day-to-day payment habits have not shifted.

The policy logic is that acceptance drives usage rather than the other way round. If the shop takes cards, the customer eventually stops carrying notes.

Brazil offers the comparison Mexican officials cite most often. Its instant payment system moved from launch to near-universal use in about four years, largely because acceptance came first.

The Arbitration Docket

A separate set of figures published this week puts Mexico among the most-sued states in investment arbitration. The data comes from the United Nations trade and development body.

In 2025 Mexico and Ukraine were the most frequently named respondents, with five new cases each. Colombia and Panama followed with four apiece.

In 2024 Mexico tied with Russia at four cases each. In 2023 it faced ten disputes.

That is a different claim from the one often made. Mexico tied with Ukraine in one year and Russia in another, rather than all three being level over a combined period.

What the Cases Are About

The Mexican government acknowledged 23 active investor-state arbitrations as of 30 June. There are also two suspended, three discontinued, four annulment proceedings and one enforcement action.

The sectoral concentration is clear. Critical minerals and energy account for the bulk of them.

That reflects the policy direction of the past two administrations. Mining concessions and energy market rules have both been revised in ways foreign investors have contested.

Fifty-six investment arbitrations were initiated worldwide in 2025. About eighty per cent were brought against developing economies.

That ratio is the structural feature behind any single country’s total. Investment treaties were written to protect capital moving from rich countries to poorer ones.

Mexico’s position reflects its exposure rather than any unique hostility. It has more foreign investment to dispute than most of the states on the list.

Trade Talks in the Background

President Sheinbaum confirmed at her Friday briefing that she spoke with President Trump on Wednesday. She called it a very good call and said the possibility of an agreement is advancing well.

She also noted that the two speak often without announcing it. That remark is worth carrying, because it explains why single calls attract more attention than they perhaps deserve.

There was one call rather than two. The Wednesday conversation was reported on Thursday and confirmed by her on Friday, which produced two waves of coverage.

The call was pre-scheduled as part of the trade agreement review. The fourth negotiating round, postponed this week, now falls on 28 and 29 September.

That review is the single largest variable in the Mexican economy this year. Nearly four fifths of Mexican exports go to the United States.

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Sources: DPL News on the digital payments bill, Expansión on the bill and the payment platforms, El Financiero on what the law proposes, El Universal on the investor-state lawsuit figures, Infobae on the Sheinbaum confirmation of the call