Peru Promotes Exploration Of New CBDC Potential To Enhance Payment System

Key Points:

• The Central Reserve Bank of Peru has released the first in a series of papers examining the need for, design, and timing of a Peruvian central bank digital currency.
• The paper is the first in a series related to the CBRP’s work on the potential deployment of a CBDC with the goal of boosting access to and usage of digital payments.
• Under a May 2021 agreement, Peru obtained technical support from the International Monetary Fund in the development of the study.

The Central Reserve Bank of Peru (CRBP) has released the first in a series of papers examining the need for, design of, and timing of a Peruvian central bank digital currency (CBDC).

In a blog post, John Kiff, research director of the Sovereign Official Digital Association (SODA), announced this. His report focuses on CBDC retail difficulties.

The document “CBDC: Promoting digital payments in Peru” is the first in a series referring to the CRBP’s work on the potential implementation of a CBDC with the goal of promoting digital payment access and use, as well as strengthening monetary and financial stability, as well as the security and efficiency of Payment Systems.

The CBRP report states:

“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 current state of competing payment systems in Peru is unsustainable, but the establishment of a CBDC, together with new policies to increase access and interoperability of existing systems, would assist the central bank in overcoming obstacles to financial inclusion and lowering transaction costs.

The CBRP sought Technical Support from the International Monetary Fund (IMF) to further the research on the probable use of a CBDC, which was agreed upon in May 2021. Throughout the research phase, Technical Support has assisted progress.

The present analysis concluded the first of five processes in the prospective creation of a CBDC, according to the paper. There is no timetable for CBDC development. In addition, the CBRP has produced a 25-question survey for prospective users, which is due on April 30.

Numerous central banks are exploring the use of a CBDC, with the development of financial inclusion as well as the efficiency and security of domestic payment systems being the primary incentives for developing nations. Australia and New Zealand Banking Group (ANZ) recently announced the completion of its use case in the Reserve Bank of Australia (RBA) and Digital Finance Cooperative Research Center (DFCRC) pilot study using CBDC.

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