Emerging countries advance in the development of digital currencies: BIS

The most common consideration among emerging market central banks testing the issuance of a digital currency (CBDC) is to provide a cash-like digital means of payment, as a mechanism to increase private credit services. digital payment and thus promote financial inclusion. This is how researchers from the Bank for International Settlements (BIS) explain it.

In the document, entitled “CBDC in emerging markets”, they highlighted the cases of Mexico, Peru and South Africa to show that the objective of the three central banks of these economies is to promote financial inclusion.

In contrast, in advanced economies where there is greater financial intermediation, the drivers of development of digital currency are found in the competition of participants and the digital transformation in payment systems.

In the aforementioned analysis, they explain that the challenge for central banks is to find a way to amplify the impact of technology and innovation in financial and payment services and improve their resilience and quality for the benefit of users.

To develop the work, they conducted a survey among 26 central banks in which deputy governors from various emerging jurisdictions participated. Six from Latin America stand out: Mexico, Peru, Argentina, Brazil, Chile and Colombia.

Mariana Project

Information from the BIS Innovation Center shows that the central banks of France, Switzerland and Singapore are experimenting with cross-border exchange of central bank digital currencies under a BIS-coordinated program called “Project Mariana”.

According to them, this project seeks to reduce transaction costs in the exchange market using protocols that can replace traditional processes.

Among the technologies involved in the new project are smart contracts and automated market maker protocols. The three countries involved seek to stimulate an eventual cross-border exchange between the Swiss franc, the euro and the Singapore dollar.

the mexican advance

Since December 2021, the Bank of Mexico informed legislators that it was working on a three-stage project to develop a digital currency.

The project has the objective of opening accounts for the registration of a digital currency for banked and unbanked people, contributing to financial inclusion.

In March, the deputy governor of Banco de México, Irene Espinosa, explained that it will be a digital peso issued by Banco de México just like legal tender bills and coins.

He explained that Banxico’s digital currency will have a retail nature, which means that it will be available to any citizen.

However, last November, the governor of the Bank of Mexico, Victoria Rodríguez Ceja stressed that “digital currency is a complex issue in which they do not want to rush.”

The first central bank to issue a digital currency was the Bahamas, which launched the Sand Dollar in October 2020, and the Reserve Bank of Jamaica, which issued the Jam Dex, and the Central Bank of Nigeria with the e- Naira.

ymorales@eleconomista.com.mx