Don José Yves Limantour and Mexican Stablecoins
When we hear or read the term “stablecoin”, the first thing that comes to our minds is the concept of “cryptoassets” that are based on blockchain and backed by currencies or assets, such as, gold and oil. However, if we analyse “stablecoins” from a technology neutral approach we will discover that the concept is rather old, as one can verify through the emergence of promissory notes and, particularly, bank notes. To illustrate this point on a specific case, I will describe the free banking model that was fostered by José Yves Limantour through the introduction of the General Law of Credit Institutions of 1897. The Finance Minister of Porfirio Díaz argued that Mexico in the XIX century needed to address local monetary needs through a system of local banks that were familiar with the referred necessities, and, consequently, he opposed the creation of a central authority like the one introduced in England by the Bank Charter Act 1844. To achieve this, Limantour introduced a stabilization system to back the bank notes issued by the Mexican free banks that would emerge from the law of 1897; thus, creating a paper “stablecoin” just as it was put in practice in countries like Scotland. Building on this experience, I will conclude that modern “stablecoins” can take some lessons from this experience, with the aim to adapt their projects around elements such as systemic, market, liquidity that go beyond the “virtues” of blockchain.
