Peru begins its digital revolution and considers a CBDC

CBDC (Central Bank Digital Currency) is a national digital currency issued by the central bank. Given the numerous benefits of electronic money and the explosive growth of cryptocurrencies, more and more governments are considering establishing CBDCs. Peru is the most recent example...

Last week, Peru’s central bank governor, Julio Velarde, said the country was developing an electronic currency. The basic goal of this new currency is to facilitate payments.

Don't confuse CBDC with cryptocurrencies. CBDCs are maintained by central banks, unlike most cryptocurrencies developed by private companies.

Peru’s CBDC plans are still in the early stages and limited information is available. According to Julio Velarde, the goal is to provide Peru with a CBDC for future difficulties. Julio Velarde, for example, commented on current technological developments in the same address. According to him, ten years from now, payment systems will be "unrelated" to current means. Peru does not want to be left behind in the development of the entire ecosystem!

Some countries are turning to CBDCs for fear of being left behind.
Many people now think of digital currencies and blockchain as part of a "sense of history". However, many countries are wary of cryptocurrencies for fear of losing their sovereignty. Additionally, the cryptocurrency boom is accelerating the growth of CBDCs.

Julio Velarde said Peru’s goal is not to be a CBDC pioneer. As a reminder, China is currently leading the CBDC race with its digital yuan already in use. Even if this is the goal, Julio Velarde pointed out that Peru lacks the resources and infrastructure to quickly establish a CBDC. Peru is not known for being crypto friendly.

Most importantly, Peru aims to avoid falling behind on CBDC and start its digital transformation.

Currently, the lack of a suitable legal framework is hindering the development of CBDC. There is no doubt that once this problem is dealt with, national electronic currencies will flourish all over the world! What about cryptocurrencies now? The future will tell, but given the technical and philosophical differences between these two assets, cohabitation is a good option…