Peru is working on a CBDC with the help of other countries

Peru joins the list of Latin American countries that are actively working on developing a CBDC.

In a panel on economic institutions organized during the Annual Conference of Executives (CADE), the president of the Central Reserve Bank of Peru (BCRP), Julio Velarde, explained that the country is making progress in creating a digital monetary system that will allow face the challenges of the financial world.

Peru wants a CBDC

According to statements published on Twitter, the head of the central bank explained that the country has been able to overcome the challenges posed by the coronavirus pandemic, but that strategically it felt the need to innovate in the way it manages finances.

Velarde explained that the Peruvian government is currently working on its CBDC with the support of other countries that are already more advanced in the matter. However, Valverde said they are not yet ready to implement this type of financial solution anytime soon despite the progress.

“There are several important projects for the payment system, but it is premature. We worked on a digital currency, we are with India, Singapore. This currency will be the one that will prevail in the future, we don't want to be left behind ”.

Despite speaking of his caution, the CBDC may be closer than expected. According to statements gathered by Reuters, the country may be ahead of other governments that already have some level of proven progress:

“We won't be first, because we don't have the resources to be first and take those risks, but we don't want to be left behind. At least we are at the same level or perhaps even further ahead of our peers of similar size, even if behind Mexico and Brazil ”.

The race for a CBDC in Latin America and the Caribbean region

A CBDC is a version of fiat currency issued by a central bank with a non-physical digital expression. It is possible to use different types of technology, although the most recent and popular is the blockchain. For example, France is already testing a CBDC with Tezos blockchain technology. Conversely, China has a near-ready CBDC that doesn't use blockchain technology.

In Latin America and the Caribbean, several countries are at an advanced stage of implementing or developing a CBDC. In addition to Mexico and Brazil (which have promised a rollout next year), the Bahamas already has its own Sand Dollar CBDC. At the same time, DCash is already used as a common CBDC between Antigua and Barbuda, Grenada, St Kitts and Nevis and Saint Lucia.

El Salvador does not have a CBDC (although it has adopted Bitcoin as its legal tender - here the quotation in real time), but there are rumors that politicians close to President Bukele are working on a proposal, as well as the fact that Bitcoin is legal tender. Similarly, Venezuela has the digital Bolivar in addition to its official cryptocurrency, the Petro.

So Peru has to work hard to catch up if it is true that it does not want to be left behind.