In its annual revision of the Uruguayan economy, the International Monetary Fund (IMF) praised the pilot plan of the Uruguayan Central Bank that made the issuance of digital money (e-Peso) a reality.
The pilot was used to test the technological aspects and run for 6 months (November 2017 to April 2018) with limited bill issuance -UY$ 20 million for 10,000 mobile users- and size per person -UY$ 30,000 per wallet and UY$ 200,000 per registered business-. The system run through a mobile line (without the need for internet connection) and was mainly used for transactions at affiliated merchants and peer-to-peer transfers.
“E-peso is expected to reduce transaction costs, encourage financial innovation, and increase financial inclusion”, IMF said on their report.
According to the organization, the same “has the potential to enhance the transmission mechanism as it provides a more systematic and transparent information on money demand in real time”. The IMF pointed out that “to the extent that the ePeso encourages innovation and competition, in the new equilibrium, interest rates could decline, improving financial intermediation and inclusion”.
“If e-peso becomes a substitute for bank deposits, it can lead to an increase (…) in the equilibrium interest rates.” it added.
At Inswitch, we feel very proud to have been part of this pilot program for the Central Bank of Uruguay through our MTS platform, together with The Roberto Giori Company and ANTEL.
Several media, including the Uruguayan newspaper “El País”, reported on this news.