The Success of the e-Peso in Uruguay

The Central Bank of Uruguay building in Montevideo, Uruguay.

The emergence of cryptocurrency and blockchain technology was the first to allow for peer-to-peer transactions in digital assets. At its inception, it was largely unregulated and out of governmental purview. This led to a worldwide hype in digital asset trading and skepticism from centres of international capital. In response, a number of countries created their own Central Bank Digital Currency (CBDC) to encourage people to invest in digital versions of national fiat currencies instead of unregulated cryptocurrencies. Uruguay was one of these countries, introducing their own e-Peso in 2018.

In Switch reported in November 2017 that the president of the Central Bank of Uruguay, Mario Bergara, had launched the pilot of its CBDC using digital banknotes through an app called e-Peso, which created mobile wallets out of mobile devices. The money would be associated to a particular device and transferred directly to another device. The digital banknotes are exactly equivalent to the physical ones. Uruguay became the first country in the world to implement the use of such digital banknotes.

In 2019, the IMF praised Uruguay’s efforts in developing the e-Peso, heralding the project a success, reported In Switch. In its report, the IMF noted that the e-Peso could “reduce transaction costs, encourage financial innovation, and increase financial inclusion.”

The e-Peso project is purportedly immensely successful, according to Be In Crypto. They noted that the e-Peso’s unique nature as a digital asset lay in the fact that it was not based on blockchain nor on distributed ledger technology. It was also revolutionary in the sense that the e-wallet did not require an internet connection and is transactable on a peer-to-peer basis.

Venezuela, Uruguay’s neighbour, launched their own digital Petro currency in 2018. Meanwhile, France and Sweden are in the process of piloting the e-Euro and e-Krona respectively.

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Raïs Tarek 87 Articles
Journalist and lawyer, with a passion for global politics, economics and current affairs.