The Central Bank of Mexico (known locally as Bexico) could be driven to issue a central bank digital currency (CBDC) – whether it likes it or not, said a financial expert.
The comments came from Mexico-based Sergio Kurczyn, a senior economist at Citigroup subsidiary CitiBanamex. Speaking to Business Insider Mexico, Kurczyn claimed that events overseas could force Bexico’s hand.
He claimed that if Bexico, which has thus far remained relatively silent on the subject of CBDCs, might be sparked into action if part of the Mexican payment system were “invaded” or given undue importance due to overseas digital currency issuances. If such digital currencies proved to be particularly easy to make transactions with, Bexico could find itself at a disadvantage.
Kurczyn, who has also prepared a report on the matter of CBDC issuance in Mexico, said that it was likely that a digital version of the peso would roll out in the “medium or long term.”
But he added that the success of bitcoin (BTC) and planned global stablecoins may have spooked the world’s central banks into action.
He stated,
“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.”
Failing to respond could be fatal, central bankers appear 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 added.
But the CitiBanamex economist claimed that biding its time on digital peso issuance could have benefits – and drawbacks – 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.”
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