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Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga
Central banks are increasingly pondering whether to issue their own digital currencies to the general public, so-called retail central bank digital currency (CBDC). The majority of IMF member countries are actively evaluating CBDCs, with only a few having issued CBDCs or undertaken extensive pilots or tests. This paper shines the spotlight on the handful of countries at the frontier in the hope of identifying and sharing insights, lessons, and open questions for the benefit of the many countries following in their footsteps. Clearly, what can be gleaned from these experiences does not necessarily apply elsewhere. The sample of countries remains small and country circumstances differ widely. However, the insights in this paper may inspire further investigation and allow countries to gain time by building on the experience of others. Importantly, the purpose of this paper is not to evaluate the courses taken by different jurisdictions, but to study and discuss their key experiences and lessons. The paper studies six advanced CBDC projects, drawing on collaboration and exchanges with the respective central banks to get insights beyond what has previously been published. Unless a specific published source is cited, all information stems from interviews and workshops with members of CBDC project teams in each jurisdiction.
Pelin Berkmen, Ms. Kimberly Beaton, Mr. Dmitry Gershenson, Mr. Javier Arze del Granado, Kotaro Ishi, Miss Marie S Kim, Emanuel Kopp, and Mrs. Marina V Rousset

Contents Abstract I. Introduction II. Financial Development and the Role of Fintech III. Fintech Startup Landscape in Latin America A. Payment Systems and Mobile Money Services B. Alternative Financing (Fintech Credit) IV. Supervision, Regulation, and Financial Stability A. Regulating Fintech in LAC B. Recent Regulatory Developments in Brazil, Mexico, and Colombia Brazil Mexico Colombia C. Challenges Ahead V. Other Macroeconomic Policy Considerations A. Central Bank Digital Currencies Uruguay—E-Peso pilot program

Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga

the role of the state in the digital payments system, including the potential role of a CBDC. BCDU, e-peso : After ending a pilot in 2018, the BCDU has changed leadership and has opted to not pursue a second pilot due to other priorities and a lack of resources. Potentially, a second pilot will be launched in the future. 2. Policy Goals of CBDC Projects Policy goals for CBDC naturally guide the ensuing exploration and work. These goals also help establish guidelines to make design and technology choices. The goals differ across jurisdictions

International Monetary Fund. Western Hemisphere Dept.

. Contents CONTEXT: RESILIENCE IN THE FACE OF MARKET TURMOIL RECENT DEVELOPMENTS OUTLOOK AND RISKS POLICY DISCUSSIONS A. Maintaining Fiscal Sustainability B. Lowering Inflation C. Maintaining Financial Sector Stability and Enhancing Intermediation D. Enhancing Inclusive Growth and Competitiveness STAFF APPRAISAL BOXES 1. Cincuentones Transaction 2. Exchange Rate Intervention in Uruguay 3. Population Aging and Pensions in Uruguay 4. Pilot for Central Bank Digital Currency (E-Peso) 5. Real Exchange Rate and Sectoral Competitiveness FIGURES

International Monetary Fund. Western Hemisphere Dept.

it is under full control and exhibits a clear decreasing trend. The staff report perfectly sums up Uruguay’s performance in 2017 by saying that it was “a good year”. However, there is no room for complacency. Good results simply ratify that policies and continual progress in its modernization are heading in the right direction, and based on them Uruguay is looking to the future: an “e-peso” pilot project (not a cryptocurrency, but a digital bill with the same functioning as a physical one), technology readiness, the substantial shift to renewable sources of

Pelin Berkmen, Ms. Kimberly Beaton, Mr. Dmitry Gershenson, Mr. Javier Arze del Granado, Kotaro Ishi, Miss Marie S Kim, Emanuel Kopp, and Mrs. Marina V Rousset
In Latin America and the Caribbean (LAC), financial technology has been growing rapidly and is on the agenda of many policy makers. Fintech provides opportunities to deepen financial development, competition, innovation, and inclusion in the region but also creates new and only partially understood risks to consumers and the financial system. This paper documents the evolution of fintech in LAC. In particular, the paper focuses on financial development, fintech landscape for domestic and cross border payments and alternative financing, cybersecurity, financial integrity and stability risks, regulatory responses, and considerations for central bank digital currencies.
Pelin Berkmen, Ms. Kimberly Beaton, Mr. Dmitry Gershenson, Mr. Javier Arze del Granado, Kotaro Ishi, Miss Marie S Kim, Emanuel Kopp, and Mrs. Marina V Rousset

. Motivations range from supporting economic development through increased financial inclusion, reducing the costs associated with physical cash, and limiting ML/FT activity. Uruguay—E-Peso pilot program The Central Bank of Uruguay implemented a successful retail CBDC pilot program . The legal tender digital currency issued by the central bank is called the E-Peso—which does not use distributed ledger technology. The pilot program was used to test the technical aspects and ran for six months (November 2017–April 2018), with limited digital note issuance ($20 million for

International Monetary Fund. Western Hemisphere Dept.
This Article IV Consultation highlights that Uruguay has preserved macroeconomic stability in the wake of the turbulence in the region due to prudent policies and the accumulation of buffers over the years. With the worsening outlook and less friendly external environment, in the near term, policies should focus on maintaining resilience. In this context, additional efforts are needed to put debt on a firm downward trajectory and reduce inflation to within the target band. The IMF staff assesses that the external position is broadly consistent with fundamentals and desirable policy settings. The authorities and IMF staff have remained in broad agreement on the macroeconomic policy objectives, including maintaining public debt on a sustainable trajectory, keeping inflation low, and allowing exchange rate to adjust in line with fundamentals. Fiscal adjustment, however, has not proceeded as quickly as had been originally expected, and inflation has proven difficult to contain within the authorities’ target range.
Sonja Davidovic, Ms. Elena Loukoianova, Cormac Sullivan, and Hervé Tourpe

, Uruguayan e-Peso in the Context of Financial Inclusion, Banco Central del Uruguay, November 16 . Loukoianova , E. , and others. 2018 . “ Financial Inclusion in Asia-Pacific .” IMF Departmental Paper No. 18/17 , International Monetary Fund , Washington, DC . 10.5089/9781484371015.087 Mbaka , C. 2018 . “ EASRA to Employ Fintech Regulatory Sandboxes and Adopt Regional Framework .” TechMoran , August 1 . Mnohoghitnei , I. ; Scorer , S. ; Shingala K. ; Thew O. 2019 . “ Embracing the Promise of Fintech .” Bank of Englad Quarterly

International Monetary Fund. Asia and Pacific Dept

Caribbean Central Bank Dcash Central Bank of Uruguay e-Peso Central Bank of Nigeria eNaira People’s Bank of China eCNY Bank of Jamaica Launch dates Pilot started Dec. 2019; launched Oct. 2020 Pilot started March 2021, still ongoing Pilot started Nov. 2017; ended April 2018 Pilot started Oct. 2021; still ongoing Pilots started April 2020; still ongoing Pilot to start in Q1 2022 Transaction fees? No, but maybe yes later None during pilot None during pilot None during first 90 days None during pilot None Interest