In December 2021, the Central Bank of Paraguay (BCP) sanctioned the establishment of a Working Group on Digital Currency. This group’s primary purpose is to monitor international initiatives concerning Central Bank Digital Currencies (CBDCs) and to conduct a thorough analysis of the potential implications associated with implementing a CBDC by the BCP. The driving force behind this endeavor is the exploration of CBDCs as a medium of exchange. The issuance of a digital currency by the BCP has the potential to provide supplementary currency for public use, aligning with the advancement of the national payment system while maintaining transaction security.
In May 2022, the BCP released a working paper that delved into the economic ramifications of introducing a Central Bank Digital Currency (CBDC) in Paraguay. The paper reached the conclusion that the design of a CBDC must align with the central bank’s objectives in pursuing public policy. Moreover, the risks related to financial stability and monetary policy would be contingent upon these objectives. In contrast, a CBDC that is not restricted in its usage and carries an interest rate, whether positive or negative, would present the most revolutionary potential for the financial system and monetary policy. However, such an option also introduces heightened complexities in its implementation.
Source:
https://www.bcp.gov.py/criptomonedas-privadas-y-monedas-digitales-n1643