Uruguay’s e-Peso pilot program was a component of a broader governmental effort aimed at advancing financial inclusion. Successfully concluded by the Central Bank of Uruguay in April 2018, this initiative entailed testing the issuance and utilization of an e-Peso for transactions. Following its conclusion in 2018, the pilot program has remained dormant.
The e-Peso pilot, executed from 2017 to 2018, offers valuable insights for current and future considerations by central banks. Through this endeavor, several essential lessons can be discerned:
- Reputation’s Role: The decision to introduce a central bank digital currency (CBDC) hinges on the reputation of the central bank.
- Motivations: Main drivers for CBDC adoption are financial inclusion objectives and cultural factors.
- Simplicity: Keeping the technological solution straightforward is crucial.
- Security and Traceability: Addressing operational risk requires focusing on security and the ability to trace transfers.
- Token Solution: Implementing CBDC via tokens proves effective.
- Usage Patterns: Digital money was primarily used for minor payments and transfers.
- Complementary Nature: CBDCs work alongside existing payment methods.
Uruguay’s e-Peso pilot stood out for its streamlined design and its demonstration that tokens and centralized computational systems can play a role in shaping final CBDC choices. This process, though an initial stride within a comprehensive approach, highlights efforts to mitigate risks while enhancing cost-effectiveness. Notably, different central banks are adopting diverse strategies, such as distributed ledger technology (DLT) solutions, account-based CBDCs, and varied interest rate structures. This diversity in design decisions, along with ongoing research by central banks, contributes to a wealth of experiences and insights that will inform better decisions moving forward.
Source:
https://www.bcu.gub.uy/Sistema-de-Pagos/Documents/Vigilancia/Libros/CBDC%20march2022.pdf