The Chilean central bank has withdrawn its plans to release CBDC by 2022. It stated that it will do extensive research on the product and then move to its launch.
Digital Peso should wait
Banco Central de Chile released a report that examined the country’s current financial network and evaluated the benefits and risks of issuing a digital currency. The central bank seems optimistic about this financial product. They believe it can strengthen the economy and protect consumers.
“A CBDC would help to achieve a competitive, innovative, and integrated payment system that’s inclusive, resilient, and protects individuals’ information.”
Further, the bank suggested that the Chilean peso could offer an alternative to bitcoin and other cryptocurrencies, which could be used in criminal operations.
“The issuance a CBDC is a good option to address the challenges associated with massification of virtual currencies. Although they play a small role in the payment system for the moment, this could change the functioning of both the financial market as well as the transmission of monetary policies if their use becomes more widespread.”
The bank, on the other hand, resisted the idea of launching a CBDC before the end 2022. Rosanna Costa, the Governor of Rosanna Costa, stated that it should be able to operate both online as well offline before being integrated into Chile’s financial system. She also suggested that the Chilean authorities create a system for tracing CBDC transactions.
Costa also noted that the Chilean digital currency should be convertible with cash and can collaborate with commercial banks to facilitate secure transactions.
After the bank has completed its research and solved the problems, the bank will decide when and how to launch the CBDC. The bank promised to publish a report by the end of this year.
Nine out of Ten Central Banks Launch CBDCs
Many central banks have been working towards introducing a digital version for a national currency over the last few years. According to recent research by the Bank of International Settlements, 90% of these institutions are actively working towards such a release.
Nearly half of respondents are also in the process of conducting or developing concrete experiments on CBDC.
Leaders in this field include countries like China, Nigeria and Malaysia. They are open to central bank digital currencies, and they often support them.
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