The Central Bank of Chile has postponed plans for a central bank digital currency (CBDC), claiming that the issuing of a digital Chilean peso necessitates a more thorough examination of the advantages and hazards, promising a fresh report by the end of the year.
The bank released a report on May 11 that contained a preliminary assessment of a Chilean CBDC. It looked at the country’s present payment system, as well as the advantages, disadvantages, and principles of establishing a digital peso.
While the present payment system “functions effectively” and has been able to “adapt well to recent obstacles,” the bank claims that a CBDC will enhance and alleviate any risks associated with digital transformation.
Chile halts CBDC for further analysis
“A CBDC would contribute to achieving a competitive, innovative and integrated payment system that is inclusive, resilient and protects people’s information.”
The bank believes there is insufficient information to make a definitive judgment on releasing a digital peso and will “carry out a series of seminars, presentations, and discussions with various counterparts” to inform the upcoming report.
Chile’s central bank said in September 2021 that it would develop a plan including suggestions and possibilities for a CBDC deployment in early 2022, as well as organize a working group to explore the possible digital peso.
The bank expressed its reservations about crypto adoption in the nation, noting the possibility of money laundering, criminal activities, and the capacity to disrupt banks’ access to funds if used as a substitute for bank deposits.
According to Statista, Chile was ranked 18th globally for bitcoin usage in 2021. Furthermore, 14% of Chilean respondents stated they owned or used cryptocurrency that year, making Chile the fourth-highest cryptocurrency user in South America.
Although Chile does not restrict the usage and trading of cryptocurrencies, it shares the concerns of other South American governments. Early in May, Argentina’s central bank intervened to prevent two banks from selling cryptocurrency services, citing the need to “mitigate the dangers crypto brings.”