January 9, 2021 | 5:00 am
The implementation of a digital currency by central banks around the world is beginning to gain momentum, but what would be the impact if Banxico does the same?
A digital currency expands the opportunities for people and companies to make transactions and acts as a complement to cash, but along the way there are challenges for Mexico, mainly because there is not high financial inclusion, according to an analysis by the director of Citibanamex Economic Studies, Sergio Kurczyn.
Although Banxico at the moment does not plan to launch a digital currency ‘CBDC’ (Central Bank Digital Currency), several central banks have already taken the first step with pilot tests, such as China.
In 2021, Japan will start with the use of its digital currency, Meanwhile he European Central Bank it must already prepare for the replacement of cash, according to Fabio Panetta, member of the monetary entity.
“The needs to be met and the challenges to be met by these potential central bank digital currencies are somewhat different for hard currency countries (large developed countries) than for developing countries,” Kurczyn wrote.
For Mexico, the manager emphasizes that, in addition to low financial inclusion, the challenge lies in the access that Mexicans who work in the United States can have “and on the type of agreements with that country regarding transfers.”
The implementation in the country must have the position of the participants of the financial system and Congress, mainly, since putting it into circulation would substantially change the financial system and would require adjustments to the laws.
The effect on the Mexican monetary and financial system will depend on the design of the MDBC (Central Bank Digital Currency): the international weight of the country where it is issued, amounts, limits per person / company, access by non-residents of those countries where they are created , international agreements
Banxico should take it easy and analyze well the use of a digital currency. In fact, the former central bank governor, Agustin Carstens has said that “there is no room for error in the implementation of digital payments.”
Although Kurczyn believes that it can be learned from other countries, the cost of delaying may be high given the global context, but he predicts that Banxico would issue its digital currency in the medium or long term.