The Central Bank of Mexico (locally known as Bexico) could be compelled to issue a central bank digital currency (CBDC) – whether it likes it or not, announced a financial expert.
The comments came from Mexico-based Sergio Kurczyn, a senior economist at Citigroup subsidiary CitiBanamex. Speaking to Business Insider Mexico, Kurczyn alleged that events overseas could force Bexico’s hand.
He mentioned that if Bexico, which has thus far nearly continued silently on the subject of CBDCs, it might be triggered into action if part of the Mexican payment system were “invaded” or given unnecessary importance due to overseas digital currency issuances. If such digital currencies were determined to be particularly easy to make transactions with, Bexico could find itself at a disadvantage.
Kurczyn, who has also provided a report on the matter of CBDC issuance in Mexico, announced that it was likely that a digital version of the peso would roll out in the “medium or long term.”
But he continued that the success of bitcoin (BTC) and projected global stablecoins might have spooked the world’s central banks into action.
“One of the reasons that central banks have accelerated their [work on CBDCs] in the last two years, is that something that […] cryptocurrencies and in particular bitcoin, with the […] Facebook Libra project [now Diem], this technology has started to become relevant.”
Neglecting to respond could be fatal, central bankers seem to feel.
“So central banks say: ‘We don’t want [state] currencies, which are physical and not digital, to be displaced by private currencies. Because the latter are not subject to regulation,” Kurczyn continued.
But the CitiBanamex economist insisted that biding its time on digital peso issuance could have advantages – and disadvantages – for Bexico, concluding,
“There are advantages in not being the first [to launch a CBDC]. The dilemmas posed by a decision to issue a CBDC are multiple and complex, and you can learn from the experiences of other countries. But delaying […] can also be costly.”