Does a 'cryptoweight' already exist? What you should know about the MMXN

Mexico already has its first stablecoin.
Does a 'cryptoweight' already exist? What you should know about the MMXN
Image credit: Vía Alto Nivel

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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
This story originally appeared on Alto Nivel

By Antonio Sandoval

Thursday debut in criptomercados the MMXN or Moneta, the criptodivisa whose emitters define it as a Stablecoin, stable currency, linked to the peso by definition.

This debut has many peculiarities, it unleashes a series of questions that will only be resolved with the passage of time. The Bank of Mexico (Banxico) itself has already established a position, but above all it has indicated that there must be great caution.

Alto Nivel was at the launch event, of course virtually, what stood out was undoubtedly a strong enthusiasm but, at the same time, an avalanche of questions impossible to answer even by the organizers. However, for the sake of providing a bit of clarity, we will answer some of the questions that stand out the most.

Is there a cryptoweight?

Seen in the strict sense of what is known as cryptocurrencies, yes, it is a 'cryptoweight'; That is, it is a cryptocurrency issued with Blockchain technology, which will also be listed as such on the market, although it has some peculiarities.

Which will be his name?

The key of the first cryptoweight, because there could be more, is MMXN, or also already defined as Moneta. This cryptocurrency, however, belongs to a branch of crypto assets called Stablecoins or stable coins.

So is it a cryptocurrency, a stablecoin, or what is it?

The MMXN is all of the above at once. It is a cryptocurrency because it is a digital currency issued with Blockchain technology; and it is a Stablecoin because it is a cryptocurrency that will be linked to the Mexican peso, it will in fact be the first in the world to be linked to our currency .

Does Banco de México approve this league between the MMXN and Moneta?

Banco de México has nothing to do with it. That relationship is established by the cryptocurrency market and means that for each MMXN or Moneta, there will be a Mexican peso that supports it. It is assumed that then, for each cryptocurrency, there will be a physical peso, a current-course peso, supporting that crypto-asset issuance. But, on behalf and order of those who operate it, not on behalf of the central bank of Mexico.

Are Banxico's reserves at risk?

Similarly, one universe has nothing to do with another. The price of the Mexican peso will be totally independent of what happens in the crypto-asset market. And, given that Banxico does not support this market in any way , it is a fact that reserves are in the same way totally on the sidelines.

Will the peso and the Moneta trade on the Mexican market at par?

They are two totally different markets. In reality, what will happen with Moneta is that each issue of one of them will be backed by a Mexican peso, regardless of the price it has in the traditional interbank market, also known as Forex.

Moneta or MMXN, is it mined or not mined for its league with the peso?

This is the main distinction of Stablecoins with respect to pure cryptocurrencies: The former are also mined, but their mining is supported by a physical currency, so that its market grows as the demand is greater, since in theory it cannot be mined without the backing of a stable currency involved.

Who and how will they accept the MMXN?

It is a question without an accurate answer at the moment. However, it is assumed that this is precisely the great objective of the MMXN issuers , to lead the cryptocurrency to be a means of payment in Mexico and in the world . Another great objective they pursue is the market for remittances from Mexicans abroad. However, those will be steps that will be taken over time.

Can I use the MMXN to buy and / or trade other cryptocurrencies?

Yes, as we pointed out, the MMXN is in essence a cryptocurrency, therefore it can be listed and traded with its peers. The crypto-peso issuers were somewhat hermetic to point out which will be the pairs with which Moneta will be traded, but it is almost a fact that there will be quotes with bitcoin and ethereum.

How and where can I purchase the MMXN?

As of last night the MMXN is listed on some platforms, the ideal is to look for the most professional one so as not to fall into excessive risks in this first stage of the birth of the Stablecoin.

Many more questions were left in the pipeline, surely over the years they will be resolved. The fact is, yes, we already have a cryptocurrency, whatever that means. There is no support whatsoever from the central bank, nor from the formal financial system . In fact, it is a Stablecoin cryptocurrency, that is, linked to a relatively stable traditional currency , but this league is defined by its issuers acquiring as many pesos as MMXN are going to issue, or mine .

And of course it is a market in total growth; According to the organizers' data, the global size of cryptocurrencies already reaches 39 trillion dollars . For its part, the global size of the Stablecoins is 400 billion dollars . So far, of the latter, 90 percent is tied to the United States dollar, that is the relevance of the emergence of the MMXN. Times keep changing.

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