The informality that prevails in the Mexican labor market is a risk factor for the management of a digital currency of current course such as the one that Banco de México (Banxico) plans to design, warned the International Monetary Fund (IMF).
This composition of the market opens the door to important risks for the financial system as a whole, where the digital currency would probably operate, they stated.
In the conclusions reached by the visit of IMF experts within the framework of the Financial Sector Assessment Program (FSAP), they recognized Banxico’s intention to eventually use this digital currency in the promotion of financial inclusion and digitization of payments
But they explained that given this characteristic of the labor market, it might be opportune to continue exploring alternatives to achieve the policy objectives at a lower cost.
The Monetary Fund experts stressed that the option for the design of the CBDC must guarantee that the model will be sustainable and that it offers limited risks to the financial system as a whole. They then proposed as an alternative the management of private digital money,
The IMF experts recognized that the management of crypto assets in Mexico does not have a deep penetration and that this could be explained by the legislation, the regulatory measures that prevail and by the fact that we are not a dollarized economy.
However, they consider that the strong commercial link with the United States may at some point encourage the handling of these digital assets.
In the analysis they admitted that the central bank has “a deep understanding of the issues related to the CBDC project” but still noted that Banxico would benefit from preparing a risk management framework and conducting a cost-benefit analysis.”
suggestions
The Monetary Fund experts proposed to include in some phase of the design of the CBDC, a close collaboration between all the interested parties (authorities, legislators, financial supervisors and private companies).
They underscored the importance of dedicating sufficient resources to each phase of Banxico’s digital currency design.
They stressed that the solid framework of macroeconomic policies will be a strength for the aforementioned digital currency and therefore it is more important to develop it with great care.
It is the first time that the IMF has ruled on the intention of the Bank of Mexico to design its own digital currency.
the mexican project
Since December 2021, Banxico informed legislators that it was working on a three-stage project to develop a digital currency that has the objective of opening accounts for the registration of a digital currency for banked and unbanked people, contributing to the financial inclusion.
In March of this year, Deputy Governor Irene Espinosa explained that it will be a digital peso issued by the central bank in the same way as legal tender bills and coins.
ymorales@eleconomista.com.mx
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