- Possible benefits cited include lowering financial inclusion barriers, strengthening monetary and financial stability
- The CBRP paper points out that the use of digital payments in Peru has increased fivefold since 2015.
CBDC-Central Bank Digital Currency adoption has spiked in several countries in recent months. The latest country to consider integrating CBDC into its monetary system is Peru. The Central Reserve Bank of Peru (CRBP) has now published a paper stating that it is looking to examine the need, design, and timing of a Peruvian central bank digital currency.
The paper notes that careful CBDC design may help reduce some obstacles to financial inclusion and interoperability of digital payments in Peru.
“The objective of a CBDC within the framework of the payment system in Peru is to give the unbanked population access to digital payments, so it is important to know their characteristics to prepare an implementation strategy,” the paper reads.
Possible benefits cited also include lowering financial inclusion barriers, as well as strengthening monetary and financial stability, and the security and efficiency of payment systems.
The report also details the obstacles that lay ahead of a successful CBDC adoption. Approximately 50% of Peru’s adult population is unbanked, and the country is still in transition from a cash-based economy to a more digital payments-oriented one.
The paper, however, also points out that the use of digital payments in Peru has increased fivefold since 2015.
The Central Bank of Peru has also requested Technical Assistance from the International Monetary Fund (IMF), which was agreed upon in May 2021 for CBDC adoption. In 2021 Central Reserve Bank of Peru President Julio Velarde announced that Peru would enter the global race to develop a central bank digital currency (CBDC).
The latest development also comes amid several regulators in Latin America taking a keen interest in cryptocurrencies to promote financial inclusion. At least five countries in the region are taking initial steps toward a central bank digital currency in the following years.
In a 2022 report, the Bank for International Settlements, or BiS, said the number of Latin American central banks working on CBDCs projects was “unusually high.” Last month, Brazil’s Central Bank announced the start of a digital currency pilot project, with the final rollout expected by the end of 2024.