2025 Public Sector Perspectives

7. E-Government: Public online services, leading by example: E-government initiatives, including digital transactions, are transforming how citizens interact with public services, making themmore accessible, efficient, and transparent. Governments across Latin America are digitizing services, from tax filing and social security to healthcare and education, enabling citizens to access services from anywhere at any time. A few countries are advancing in national ID systems, which enable secure online identification for accessing government services. Uruguay, Chile, Argentina, Brazil, Costa Rica and Peru, are countries leading EGDI, E- Government Development Index , with good examples of digital simplified and centralized access to public services with portals where citizens can access hundreds of online government services. 8. Financial Market Infrastructure (FMI) modernization agenda: Latin America’s FMIs are changing dramatically. The transition to digital money is a cornerstone of the digital economy, and governments and Central Banks are playing an active role. We can find several Central Banks in the region developing a clear modernization agenda around: • Instant payments schemes and interoperability. These are the top priorities to facilitate cashless transactions, promote formal commerce and increase financial inclusion. Brazil with PIX, launched by the Central Bank of Brazil, has been an instant payments global referent, enabling millions of people to conduct real-time digital transactions with ease use and to support multiple use cases. Other countries have advanced also in enabling instant payments schemes, improving efficiency of payments across the economy as Argentina, Chile, El Salvador, Mexico, Paraguay, and Peru. • Open banking/Open finance/Open data: These foster data and payments interoperability, efficiency, and competition by enabling third-party providers, such as Account information payments providers (AISPs) and Payment initiator service providers (PISPs) , to access customer data and to initiate payments, with the explicit consent of the individual/business account owner. Brazil leads the region, having successfully deployed 4 stages, while Mexico has deployed its first stage 1. Chile and Colombia are making progress with regulatory frameworks and have started implementing, while other Latin American countries are under proof-of-concept phase. • Central Bank digital currencies (CBDCs). Governments are also exploring the potential and impact of Central bank digital currency, to help modernize financial systems. Bahamas was the first country in the world issuing a CBDC, the SandDollar in 2020, followed by Jamaica issuing Jam- Dex in 2022, and Brazil is piloting DREX. On the other hand, El Salvador was the first country in the world to adopt Bitcoin as legal tender currency, deploying a government e-wallet named Chivo. While the impact and success of these initiatives are in different stages, the evolved and forward-looking thinking of the Central Banks is a proof of the governments desire to work on Digital Money programs. Lastly, there is a big contribution in this transformation from the financial sandboxes—regulatory environments that allow financial institutions and new players to test innovative financial products under government supervision—which are available in countries like Brazil, Colombia, Mexico, and Peru. These sandboxes promote innovation while ensuring that consumer protection and financial stability are maintained. Financial Innovation Hubs, available in Argentina, Bahamas, Brazil, Colombia, Costa Rica, Dominican Republic, El Salvador, and Guatemala, are also contributing to these innovation efforts. By promoting this FMI evolution, governments are not only modernizing financial infrastructures but also providing citizens with more secure and efficient ways to conduct transactions, thereby reducing reliance on cash, and fostering a more inclusive financial ecosystem to harness the opportunity of the digital economy. Conclusion Latin America is brimming with potential when it comes to digital money adoption, fueled by a collaborative spirit. The role of government in advancing Latin America’s digital economy is multifaceted and pivotal. From building robust regulatory frameworks to promoting digital inclusion, cybersecurity, and financial innovation, government entities are laying the foundation for a future that is not only digitally integrated but also equitable and secure. Despite these advances, significant challenges remain so there is still a long journey ahead to advance in digital money readiness. Through proactive policies and strategic investments, and the right necessary incentives to support a cashless and digitally integrated economy, governments can harness the transformative power of the digital economy to drive economic growth and improve the quality of life for all citizens. Citi Perspectives for the Public Sector 57