Peru is working to develop its own digital currency, also known as a Central Bank Digital Currency (CBDC).
This was announced by the president of the Banco Central de Reserva del Perú, Julio Velarde, saying that the digital currency will be part of future payment systems.
Progress on the digital currency in Peru
Julio Velarde announced work on the country’s digital currency during the first day of the CADE Executive. Here were his words:
“We have been working on a digital currency. We are in a lot of projects with several central banks: with India, Singapore, Hong Kong and with a lot of central banks, thinking of a digital currency that is going to be the one that will prevail in the future”.
The President of the BCRP also recalled that the payment system that will exist in 8/10 years will be completely different from the current one and that therefore, it is also necessary for Peru to join with its CBDC.
Unlike other countries, Velarde explained that the Peruvian market will not be the first to access this digital currency because they do not have the resources for this purpose or to face the risks involved, but that the will is definitely not to be left behind in the process of adaptation.
The skills to develop the digital currency
Velarde reiterated the need for the Congress of the Republic to elect three technical profiles to the board of directors of the highest issuing entity. Last time, Rafael Rey, José Chlimper and Elmer Cuba were elected.
Expertise in this area is also needed to keep up with other countries such as Mexico and Brazil, which have moved ahead of Peru in the development of a CBDC.
In this regard, Erick Iriarte, a lawyer specializing in digital law explained:
“Most of the cryptocurrencies circulating in the world are privately held. The discussion is: can I trust a currency that has no institutional backing? Velarde proposes a currency backed by the BCRP to be used as an exchange currency, both between different countries and for local use.”
Iriarte’s doubts about CBDCs are based on the issue of inflation, which Peru also suffers from, and also on the fact that a Central Bank Digital Currency is not Bitcoin, the queen of crypto that has been made legal tender in El Salvador.
CBDC announcements in the last month
In the last month, countries such as the UK, Nigeria and Israel seem to have declared that they also have a CBDC project.
The UK founded the Digital Pound Foundation, an independent organization formed by a group of private-sector professionals, to support the creation of the digital pound.
Nigeria, on the other hand, was close to launching eNaira, the country’s CBDC, on 1 October, the 61st anniversary of its Independence Day. The postponement of the launch date, which then took place on 25 October, appears to have been bureaucratic over the misuse of the name ‘eNaira’, which should have been put under review.
Israel instead seems to be leaning towards the use of a permissionless blockchain, announcing that the Bank of Israel would opt for Ethereum as the blockchain on which to build its CBDC, the digital shekel.