Peru will collaborate with the central banks of India, Hong Kong, and Singapore on a CBDC

Peru’s central bank head has stated that the nation would collaborate with India, Singapore, and Hong Kong to build its own digital currency.

Julio Velarde, head of Peru’s Central Reserve Bank, said that his nation would join the worldwide competition to build a central bank digital currency (CBDC).

On Tuesday, at the Annual Conference of Executives with business executives in Lima, he stated: “I believe that the payment system that the globe will have eight years from now will be entirely different from the one we now have… Even the banking system will very certainly be transformed.”

Velarde added that Peru would collaborate with central banks from nations that are farther along in developing CBDCs, such as India, Singapore, and Hong Kong. A CBDC is a digital representation of a country’s fiat currency that is issued and managed by the central bank of that country.

“We will not be the first, because we lack the means necessary to be the first and incur those dangers,” Velarde said, adding, “However, we do not want to lag behind.” We are at least on par with, if not ahead of, similar-sized nations, while we lag behind Mexico and Brazil.”

According to the Atlantic Council, 87 nations (representing more than 90% of global gross domestic product) are now exploring the possibility of establishing a CBDC, and seven have already done so. In comparison, just 35 nations were contemplating building a CBDC in May 2020.

Although it lacks a CBDC, El Salvador’s acceptance of Bitcoin as legal cash on Sept. 7 has refocused regional attention on digital assets.

Mexico and Brazil want to establish CBDCs before 2023, while the Bahamas already has a Sand Dollar CBDC in place. Regarding Peru’s potential CBDC development partners, the Reserve Bank of India intends to begin a trial deployment of the digital rupee by the end of the year, but is taking its time to guarantee a seamless rollout.

“We are proceeding with utmost caution since this is a novel product, not only for the RBI, but for the world,” Reserve Bank of India Governor Shaktikanta Das told CNBC in August.

The Monetary Authority of Hong Kong continues to investigate the idea of launching a digital Hong Kong dollar in order to capitalise on possible advantages for retail trading across the city’s cross-border marketplaces.

Additionally, the Singapore Monetary Authority has published plans for a privately constructed retail CBDC as part of its “Project Orchid project.” They are all vying to catch up with China, which has processed a total of 62 billion digital yuan, according to the People’s Bank of China’s head of digital currency.

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