Fundamental pieces of the financial infrastructure of a country are the payment and securities settlement systems, these invigorate the circular flow of income by enabling the execution of commercial and financial transactions.

Within the framework of the integration process of the Common Market of the South (MERCO- SUR), the Colonia Protocol was drawn up on January 17, 1994, for the promotion and reciprocal protection of investments in order to contribute to the reduction of regulatory asymmetries identified within the national markets regarding the treatment of investors from MERCOSUR member countries; becoming the first documentary precedent to move towards financial integration (OAS, 2022).

According to ^{Aboal, Lanzilotta and Perera (2007}), countries reach a process of financial integration when the agents of a given country have access to the same financial instruments and services within said market, and face identical financial rules.

The methodology proposed by Chinn and Ito (2007) makes it possible to identify the degree of financial openness in a region through an index that analyzes the restrictions on capital and cu- rrent account transactions, the presence of multiple exchange rates and the variable that shows the requirements in the processes inherent to the export.

Likewise, knowledge of the size, structure, and efficiency of a country’s financial sector through domestic credit granted by the financial sector, the supply of banknotes and coins, quasi-money, bank liquid reserves, the cost of mobilizing liabilities, interest rates and the financial spread con- tribute to the identification of the efforts required in pursuit of financial integration.

In this context, the Board of Directors of the Central Bank of Paraguay (BCP) through Resolution No. 8, Act No. 29 of April 15, 2008, accepted the World Bank’s proposal for the provision of ad- visory services in the design and implementation of the reform and modernization of payment and securities settlement systems in Paraguay (DNCP, 2022).

Said project contemplated the technological update and the establishment of a communications network between the issuing entity and the financial institutions in order to promote an environment of reliability and high security.

To this end, the Board of Directors of BCP, in November 2013, decided to order the start-up of the Electronic Payment Systems of Paraguay, known by the acronym SIPAP.

The SIPAP is made up of the following components: Gross Settlement in Real Time; Public Securities Depository, with titles issued by BCP and the National Government; Check Clearing House and the Automated Clearing House. The operations recorded in the first two components are classified as high value and those linked to the other components as low value.

In this sense, the aforementioned components allow the SIPAP to be characterized by making settlements electronically, dematerialized and in real time; this benefits the Entities that participate in the financial exchange by receiving information in real time, reducing operating costs, the use of paper and the physical exchange of money (BCP, 2022a).

Similarly, SIPAP fostered the creation of a cross-border payment system in local currency; this allows importers and exporters to make payments and collections in their respective currencies. For this purpose, the BCP signed an agreement with the Central Banks of Uruguay, Brazil and Argentina in 2015, 2016 and 2019 respectively. These documents are accompanied by an operating regulation that was signed two years after the signing of the agreement (BCP, 2022b).

The operating regulations detail, among other aspects, the processes involved in the payment order, which lasts three business days. On the first day the payment orders are accepted, the exchange rates between the local currency of each country with respect to the dollar are communicated; Likewise, the rates that will be used for the conversion of the value of the Guaraní operations with respect to the currencies of the MERCOSUR member countries and the exchange of registered operations between the Central Banks are disclosed.

In the second day, the registered operations are debited, those that were rejected due to insufficient funds are communicated, the information on the unilateral balances is obtained and the debtor Central Bank (BC) settles the bilateral balance to the creditor CB through the correspondent. This last action allows that, on the third day, the CB credits in the accounts of the authorized financial entities the amount corresponding to the payments made by the Local Currency Payment System (SML) to deliver to the beneficiaries.

The open data of the BCP allows us to identify that in 2019, 1,014 payment orders were registered between Paraguay and Brazil through the SML for a value of USD 50,894,634, between Paraguay and Uruguay a payment order for USD 636, and, between Paraguay and Argentina records are available from 2021 (BCP, 2022b).