The Central Bank of Chile withdrew plans to release a CBDC by the end of 2022, saying it would thoroughly research the product and conduct additional analysis before moving on to its rollout.
Digital peso should wait
Banco Central de Chile released a report that focused on the country’s current currency network and examined the risks and benefits of issuing a digital version of its national currency. Apparently, the central bank is optimistic about such a financial product as it could strengthen the economic system and ensure consumer protection:
“A CBDC would help create a competitive, innovative and integrated payments system that is inclusive, resilient and protects people’s information.”
“Issuing a CBDC is also a good alternative to face the challenges related to the potential massing of so-called virtual currencies, which, although they currently play a very minor role in the payment system, could change the functioning of the financial market and the Transmission of monetary policy when its application is widespread.”
On the other hand, the bank held back on its intentions to launch a CBDC by the end of 2022. Gov. Rosanna Costa said it should operate both online and offline before being integrated into the country’s financial network. Unsurprisingly, she added that Chilean authorities should create a system to track CBDC transactions.
In addition, the Chilean digital peso should be convertible into cash, work with commercial banks, and offer secure transactions, Costa noted.
Once the bank has completed its research and resolved the issues, it will decide if and when to introduce CBDC. The organization promised to publish a report on the subject by the end of the year.
Nine out of ten central banks are considering adopting CBDCs
Introducing a digital version of a national currency has been a mission for many central banks in recent years. Recent research conducted by the Bank for International Settlements (BIS) found that 90% of these institutions are working towards the release of such a product.
Additionally, nearly 50% are in the process of developing CBDC or “running concrete experiments.”
Countries like China, Nigeria, Malaysia and Thailand are leaders in this field. Their authorities are very supportive of central bank digital currencies and often run projects to make them better known.
Source: Crypto News Deutsch