CBDC Pilot Program to Kick Off in Peru

The Central Reserve Bank of Peru (BCRP) announced a pioneering initiative to modernize the nation's financial infrastructure.

In partnershipt with Viettel Peru S.A.C., BCRP has embarked on a year-long pilot to integrate Central Bank Digital Currency (CBDC) into the existing financial system. The collaboration marks a significant step toward adopting digital currency in Peru.

The pilot will engage stakeholders to ensure the system's design and functionality meet the BCRP's requirements.

This approach aims to enhance user adoption and address potential barriers to entry. According to the official file, "Following a selection process conducted under Circular No. 0011-2024-BCRP, the management of the BCRP issued Resolution No. 0009-2024-BCRP, which establishes that the Participant of the First Digital Money Pilot is the company Viettel Perú S.A.C."

BCRP's 2023 Report on Digital Currency

In March 2023, the Central Reserve Bank published an insightful report exploring CBDC adoption. The report underscored that digital currency is a liability of a central bank used by the public as money. "A CBDC can be complementary to the set of existing payment instruments, including banknotes and coins issued by the BCRP," the report stated.

Peru faces significant challenges transitioning from a cash-based economy to a digital one. These challenges include low financial inclusion and high payment service costs.

The report emphasized that overcoming these hurdles is crucial for achieving policy milestones. Such milestones include increasing digital payments among the unbanked population and building greater trust in payment systems.

The BCRP is considering three options to address these challenges: maintaining the status quo, improving access and interoperability of existing payment systems, and introducing a CBDC. The report concluded that Option 1 is not viable, while Options 2 and 3 form complementary policy strategies.

Future Prospects and Expected Outcomes

The report highlighted that introducing a digital currency will enhance Peru's payment landscape. Key features include instantaneous and final payments, universal accessibility, and multiple use cases.

The pilot aims to explore these features in real-world scenarios and gather data to shape future policies.

In conclusion, the partnership between the Central Reserve Bank of Peru and Viettel Peru marks a significant milestone in the country's journey towards digital financial inclusion.

The year-long pilot will provide valuable insights into the practicalities of CBDC implementation, paving the way for a more inclusive and efficient financial system in Peru.