Digital currency: what benefits can the BCRP proposal have in our country?

A lots of central banks from different nations of the world have begun to work on the development of their digital currencies such as Sweden, China, Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia, Grenada and the European Union itself.

Last Tuesday, November 16, the President of the Central Reserve Bank of Peru, Julio Velarde, has declared that the country would be joining this wave.

According to Matias Maciel, CFO & Co-Founder of Rextie, although the concept is still incipient and has not been translated into reality in any country in the world, it is considered pertinent to comment on some benefits that this reality could bring.

– Reduce bankarization costs: In developing countries like ours, there is a high proportion of people who are not yet banked or who do not have access to financial services under acceptable conditions.

Therefore, a virtual currency would lower costs, since it will not be necessary to open a bank branch in the vicinity, or make expensive investments to reach that audience, but through direct communication (through the Internet) between the person and the Central Bank of the country, you could access a personal account and the balance of your holdings.

– Greatly facilitate the fight against Money Laundering: By executing all operations digitally, and through cryptography and public records, it will be much simpler for the monetary authority to track the traceability of the money over time, being able to know where it came from and where it went. Transparent with all the history of the transactions carried out.

– Eliminate the risks of intermediaries in the financial system: Through digital currencies, central banks will maintain a direct relationship with consumers. In other words, the Central Bank issues it and it can be transferred directly to consumers. With this, risks related to intermediaries are eliminated.

For example, what happens if the bank runs out of cash? What happens if rumors of a certain bank run against a bank or groups of banks put the financial stability of the system at risk? These problems are completely eliminated with digital currencies, since the Central Bank will have control at all times of the amount of money circulating, within the country. So in the end, it should generate greater stability in the local financial system.

– Simplify the process of implementation of monetary policy and government functions: Since the process of transfers between banks or to the general public will be through the digital world, this can be automated in order to specify certain filters and conditions that allow the management of the amount of money in the bank to be controlled and carried out in a highly efficient manner. economy, as well as facilitating payments of subsidies or transfers to certain sectors of the population, said the specialist.