The Central Bank of Chile has revealed that it is studying how to issue a national digital currency, the digital peso. The bank released a report titled “Issue of a Central Bank Digital Currency in Chile”, in which it explores the possibility of creating a Central Bank Digital Currency (CBDC) in the future, the mechanism it could use and how it will consult all sectors of the economy on this issue.
The Central Bank of Chile considers issuing a CBDC
More and more banks in Latin America are considering issuing their own central bank digital currencies (CBDCs) to take advantage of the various opportunities they may present. The Central Bank of Chile has just published a new report studying the opportunities and disadvantages that issuing a digital peso could bring. The report, titled “Central Bank Digital Currency Issuance in Chile,” also explores the different forms such a currency could take.
The document, drafted by the bank’s payments group, was “framed in a context of increasing digitization of payments, which has been driven by rapid technological advancements and the incorporation of new instruments and players in the payments market” . In this sense, the report concludes that:
Issuing a CBDC would increase the benefits associated with digital transformation, while mitigating some of its risks. In particular, a CBDC could contribute to the development of a more competitive, innovative, integrated, inclusive and resilient payment system.
The report also calls for further analysis of the cost-benefit balance of issuing such a currency.
More studies needed
While many central banks around the world are studying and investigating the issuance of digital currencies, few have moved to the execution phase. The document calls for more analysis and study in this regard, as there are virtually no standards or best practice guidelines on how to proceed with the construction of such a project.
Currency digitization could also have unforeseen negative effects on the national economy, so any implementation in the future will have to be “carefully analysed”. However, the central bank considers that now is the time to face up to this task and start working on its technical capabilities, and move forward with the development of projects aimed at testing different implementations of the currency.
The bank also said it will continue to consult and maintain an open dialogue with all institutions in the economic sphere. Brazil and Mexico are other Latin American countries that are also working to establish their own CBDC.
What do you think of the report published by the Central Bank of Chile? Tell us in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Warning: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.