Adoption and welfare effects of payment innovations: The case of digital wallets in Peru

This article analyzes the Central Bank Digital Currency (CBDC) pilot program of the Central Reserve Bank of Peru (BCRP), which aims to gather insights to assess the retail CBDC as a tool to promote the adoption and use of digital payments, especially in areas with low financial inclusion. The document outlines how the BCRP developed a phased approach—covering research and validation of assumptions—with technical assistance from the International Monetary Fund. The pilot’s design is based on a hybrid model in which the private sector provides services and maintains relationships with end users, while the central bank ensures issuance, governance, and oversight. A key feature of this pilot is its offline payment functionality, enabled through a telecommunications company operating in remote areas beyond the reach of traditional financial systems. This functionality addresses the fact that many people in rural areas do not have access to smartphones. The article highlights the quasi-experimental design of the pilot, which uses randomized marketing promotions at the district level to evaluate the impact on digital payment adoption and cash substitution, among other variables. The document provides an example of a practical approach that allows central banks to gather insights to assess the potential of digital money to promote access to and use of digital payments, as well as to generate improvements in well-being in regions with low financial inclusion.