To “digitize payments” Paraguay launches instant system

To "digitize payments" Paraguay launches instant system

Key facts:
  • The system will be launched on May 23, 2022, as indicated in Resolution No. 6 of the BCP.

  • Transfers and payments can be made at any time, every day of the year.

The Central Bank of Paraguay announced this week the launch of the “Instant Payment System” (SPI), which, among other things, will allow interbank transactions at any time of the day.

This was reported in a release, where they highlight that it will be May 23, 2022, the day of entry into force of the SPI, which they describe as a “qualitative leap” in the Paraguayan payment system.

As required, local families and businesses may make payments or transfers “with immediate accreditations in mind at any time of the day throughout the year.”

They clarify that with this instrument, there will be a “reduction in costs, increased security and transparency”; in an effort by the Bank to strengthen the digital payment system.

According to the issuing entity, “significant investments” in technological infrastructure and software were needed to implement the tool “to support the exponential growth of transactions at the country level.”

Resolution details

The implementation of the CPI is established in the Resolution No. 6 of Act No. 50 dated October 21, 2021 of the BCP. In it, they reveal that the company in charge of the project was CMA Small Systems AB, a business software company based in Stockholm, Sweden and with which they have already worked for the implementation of the National Payment System.

They also state that the creation of the SPI responds, among other things, to the “very important increase” in the amount and in the number of transactions carried out. electronically between clients towards consumers, channeled through SIPAP. Likewise, they elucidate that retail operations are the main source of growth.

They also argue that the project seeks to meet “the new technical and essential needs” of businesses, and that the BCP is updating and expanding its services, starting with the SPI.

This service will promote the digitization of payments and discourage the use of cash, contributing positively to the reduction of transaction costs, financial transparency and financial inclusion.

Central Bank of Paraguay (BCE).

They emphasize that the SPI will be an integrated platform to the Real Time Gross Settlement system (LBTR) and the DEPO / X (Public Securities Depository), which will provide citizens with the possibility of making transfers at all times, “Immediately and safely.”

The instant payment system that will be launched by the Central Bank of Paraguay has some similarities with the Bitcoin network, such as payment from a mobile device in a few steps, as well as security for data and transactions. The low commission (or sometimes none) for operations are another of the varieties similar to BTC that the Paraguayan bank promotes to gain spaces.

To "digitize payments" Paraguay launches instant system
To implement the tool, “significant investments” in technological infrastructure were needed / Source: BCP.

Are they ignoring the growth of bitcoin use or is it competition?

Although there is talk of the digitization of payments in Paraguay, there is no mention of bitcoin and the other cryptocurrencies on the market, despite the fact that there is a sustained growth in the Users quantity of the emerging ecosystem in that country.

It seems that, as in a move very similar to the Brazilian one, although with certain differences; the Central Bank of Paraguay could be competing (without admitting it) with bitcoin.

In fact, it is known that, currently, there are entertainment venues that accept payments with bitcoin and the other digital assets and even a university that can also be canceled with these currencies.

In addition, bitcoin is seen in Paraguay as an ideal tool to carry out important transactions, like that of imports. The example was Bitex, a company that in 2019 provided the necessary services for merchants to bring merchandise from Argentina to that country.

And not to mention the sale. Right now, there are platforms that offer these types of services for residents of Paraguay. Binance, Coinbas, Bit2Me and Cripex stand out for those services.

The penetration of BTC in that country is so much that there is already shops and businesses that work with that and other cryptocurrencies, accepting them as payment methods. Examples are the vegan restaurant Be Okay and the Teranu spa.

But guarani it is also not a weak currency. It is also known that the local currency of Paraguay is, among the several in the region, one of the most stable; in addition to the fact that the Paraguayan economy presents levels of inflation relatively normal, barely 1% in September last.

Even Paraguay is one of the countries that demonstrated signs of economic recovery in recent months, according to the managing director of the International Monetary Fund (IMF), Kristalina Georgieva,

Thus, it only remains to await the performance of this system of instant payments, which, the BCP promises, will speed up the development of trade and contribute to the economy; one of the many possibilities that bitcoin also offers.

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