Peru becomes the latest country to indicate a significant interest in developing a central bank digital currency (CBDC) as it pledges to intensify efforts toward a future launch date.
In a recently published paper titled “CBDC: Promoting digital payments,” the Central Reserve Bank of Peru (BCRP) noted that launching a digital iteration of its currency was imperative to improve monetary and financial stability. The South American nation is also keen on using CBDCs to lead its foray into digital payments to improve the efficiency of local payment systems.
Currently, the BCRP is stuck in the research phase and clarified that several papers would be released in the coming weeks in support of a CBDC. The central bank announced the launch of a survey to gauge the viewpoints of industry stakeholders on plans to proceed with the project.
“Subsequently, the input from surveys will be utilized to carry out a next phase of exploration, including a more targeted assessment and testing of specific aspects of digital payments, including CBDC,” said the BCRP. “This next phase will convene and benefit from the views of technology providers, regulators, and experts from various fields.”
Back in 2021, Peru’s central bank solicited the help of the International Monetary Fund (IMF) to offer technical assistance on its plans to explore the possibilities of a CBDC. The central bank noted that the IMF has been instrumental in the progress made so far, but the country faces an uphill climb in achieving its goals.
The report failed to disclose information about the CBDC design, remaining coy over the launch of retail or wholesale CBDCs. With nearly three-quarters of the country’s population unbanked, the promise of digital payments remains a possibility, given the proliferation of mobile phones.
“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,” read the report.
Just a matter of time for CBDCs
Central banks are making a frantic dash for the development of CBDCs as they try to close the distance between pioneering nations. Nearly 100 countries have begun probing the possibilities of a CBDC launch date, while only a handful has turned their backs on the offering.
In Europe, the tentative date for the launch of the digital euro is 2026, forcing commercial banks and other financial institutions to brace themselves for the sweeping changes left by a CBDC in its wake. Asian countries of Singapore, Thailand, and the United Arab Emirates are inching forward with their developments, while others are pushing the limits by exploring the functionalities of cross-border payments in CBDCs.