According to the Central Bank of Chile, it’s currently studying ways of issuing a digital national currency called the digital peso. The bank issued a report titled “Issuance of a Central Bank Digital Currency in Chile,” where it explores the possibility of the creation of a central bank digital currency (CBDC) in the future, the mechanism it might use, and how it will consult all sectors of the economy on this issue.
Central Bank of Chile considers CBDC Issuance
Latam’s banks are more interested in issuing their own digital central bank currencies (CBDCs). This allows them to seize the various opportunities. A new study by the Central Bank of Chile examines the drawbacks and opportunities that the issue of digital pesos might present. The report, titled “Issuance of a Central Bank Digital Currency in Chile,” also studies the different forms that such a currency might take.
The document, authored by the payments group of the bank, was “framed in a context of increasing digitization of payments, which has been driven by rapid technological progress and the incorporation of new instruments and players in the payment market.” In this sense, the report concluded that:
While the CBDC will enhance some benefits of digital transformation, it could also mitigate some of its inherent risks. The CBDC may be able to contribute to the creation of an innovative, competitive, integrated, inclusive, resilient and sustainable payment system.
This report calls for additional analysis on the cost-benefit ratio of issuing such currency.
We need more studies
Many central banks around the globe are investigating and studying the issue of digital currency. However, few have made it to the implementation phase. This document requires more research and analysis, since there is virtually no standard or best-practice guideline for how to construct such a project.
Digitization of the currency could also cause unforeseen negative impacts on the national economy, so any implementation in the future would have to be “carefully analyzed.” However, the central bank considers that this is the time to face this task and start working on its technical capabilities, and advance in the development of projects directed to test different implementations of the currency.
It also said it would continue to consult and maintain an open dialogue all institutions involved in the economy. Mexico and Brazil are also part of Latam’s efforts to create their own CBDC.
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