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The Central Bank of Chile has announced that its plans to develop and release a central bank digital currency (CBDC) are delayed in a bid to conduct a deeper analysis of a digital token for the country’s financial ecosystem.
According to a report published by Chile’s national bank, the issuance of a digital Chilean peso requires more insight into the benefits and risks of the CBDC. A new report on this will be released towards the end of the year. The report offers an initial evaluation of the digital currency for the country, considering the current financial system and how a CBDC might impact the national currency. According to the bank, the current system operates “adequately” currently and has managed to adapt to recent challenges in the global and national economy. As per the report, adding a CBDC to the country’s financial operations might benefit the country’s innovative transformation, and reduce risks of falling behind in a shifting digital world:
“A CBDC would contribute to achieving a competitive, innovative and integrated payment system that is inclusive, resilient and protects people’s information.”
The future of crypto in Chile
However, at present, the bank believes that there is not enough information to make a decision about issuing a digital peso. For now, the bank will continue the investigation into the CBDC and will “carry out a series of seminars, presentations and meetings with different counterparts” as part of the process to build the new report. Last year, in September, the central bank of Chile said that it would build a strategy with options to launch the rollout of a CBDC early this year. However, the delay comes as part of concern related to cryptocurrency adoption in the country. With crypto as an untraceable and anonymous industry, the possible use in illicit activities has given Chile pause in the digital currency. As per the bank:
“The issuance of a CBDC is also a good alternative to face the challenges associated with the potential massification of so-called virtual currencies, which, although for now they have a very small role in the payment system, could alter the functioning of the financial market and the transmission of monetary policy if its use becomes widespread.”
Despite the central bank’s concern, Chile is in the top 20 countries in the world that saw cryptocurrency adoption last year. 14% of polled respondents from Chile as part of a survey from Statista noted that they owned or had used cryptocurrency in 2021. As it stands, Chile has not put any ban on the use or trade of Bitcoin or other cryptocurrencies, even though there might be worries about the widely unregulated nature of the industry.