The error message indicates a problem with the locale setting. To fix this as indicated by other answers you need to modify your locale.
On Mac OS X Sierra I found that the best way to do this was to modify the ~/bash_profile file as follows:
export LANG="en_US.UTF-8"
export LC_ALL="en_US.UTF-8"
export LC_CTYPE="en_US.UTF-8"
This change will not be immediately evident in your current cli session unless you reload the bash profile by using: source ~/.bash_profile.
This answer is pretty close to answers that I've posted to other non-identical, non-duplicate questions (i.e. not related to pipenv) but which happen to require the same solution.
To the moderator: With respect; my previous answer got deleted for this reason but I feel that was a bit silly because really this answer applies almost whenever the error is "problem with locale"... but there are a number of differing situations, languages, and environments which could trigger that error.
Thus it A) doesn't make sense to mark the questions as duplicates and B) doesn't make sense to tailor the answer either because the fix is very simple, is the same in each case and does not benefit from ornamentation.