By Shelly Melancon (Switzerland)
Various countries of the world have already started experimenting with their CBDCs. While countries like Nigeria, the Bahamas, and China have fully launched theirs, other countries are still in the development phase. Peru has joined the list of countries that wants to develop its CBDC.
The president of Central Bank of Peru, Julio Velarde, disclosed on Tuesday at the Annual Conference of Executives that the country will enter into a partnership with central banks of India, Singapore, and Hong Kong. Velarde stated that these countries are more advanced in the development of the new digitized fiat currency, and will prove beneficial in the country’s drive to financial inclusion.
Velarde said that the payment and financial system the world would have eight years from now would be completely different from the present one. CBDC is the digitized form of the nation’s fiat currency and controlled by the country’s reserve bank. It has often been labeled as the future of the financial system and the money market.
The president said that although the country isn’t the first to launch a CBDC, it won’t most definitely be the last. According to him, Peru is ahead of countries within its level except Brazil and Mexico.
More Countries Join the Global Race of Researching a CBDC
The Atlantic Council, a body that tracks world economy and CBDC development, revealed that close to 87 countries are presently researching their CBDC, while seven have already launched one. Compared to mid-last year, only about 35 countries were researching a CBDC. This shows the renewed interest in facilitating cross-border payments and encouraging financial inclusion.
Brazil and Mexico have revealed that they could launch their digitized fiat currencies before 2023. India has stated that it will launch a trial implementation, more of a testnet of the digital Rupee before the end of 2021. However, the Governor of the Reserve Bank Shaktikanta Das, said that the country is taking its time to ensure that everything goes according to plan, especially since it’s a new product that hasn’t been implemented before.
Hong Kong is exploring the possibility of introducing its digitized Hong Kong Dollar to take advantage of the benefits of retail trading. Singapore is also in line to have its retail CBDC, and it’s hoping to catch up with China that has over 62B Yuan processed in transactions and over 140M individual accounts.
BTC Adoption Still in Sight
However, there are a few countries that aren’t considering the launch of a CBDC, but cryptocurrency adoption. These countries include; Venezuela, Argentina, and Cameron. Due to their huge debt profiles, these countries see cryptocurrencies as the only option to opt out of these debts.
El Salvador thought the same, and that prompted them to adopt BTC as a legal tender in early September. The country has over 700 BTC and capitalizes on the dip for more purchases.
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