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 “Issuing a Central Bank Digital Currency in Chile”, which explores the possibility of creating a central bank digital currency (CBDC) in the future, the mechanisms that may be used and how to consult various sectors of the economy on the issue superior.
Central Bank of Chile considers issuing CBDC
More banks in Latin America are considering issuing their own central bank digital currencies (CBDCs) to take advantage of the different opportunities they may offer.The Central Bank of Chile has just release A new report examines the possible opportunities and downsides of issuing a digital peso. The report, titled “Issuing a Central Bank Digital Currency in Chile,” also examines the different forms such a currency could take.
Written by the bank’s payments division, the document “was developed in the context of the increasing digitization of payments, driven by rapid technological advancements and the entry of new tools and players in the payments market.” In this sense Said the report concluded that:
The issuance of a CBDC would enhance the benefits associated with digital transformation while mitigating some of its risks. In particular, CBDC can help to develop more competitive, innovative, comprehensive, inclusive and resilient payment systems.
The report also called for further analysis of the cost-benefit balance of issuing the currency.
more research needed
While many central banks around the world are researching and investigating the issuance of digital currencies, not many have entered the implementation phase. The document calls for more analysis and research in this regard, as there are few standards or best practice guidelines on how to proceed with the construction of such projects.
The digitization of money could also have unforeseen negative effects on the national economy, so any future implementation would have to be “carefully analyzed.” However, the central bank believes that it is time to face this task and start working on its technical capabilities, as well as advancing the development of projects aimed at testing different implementations of the currency.
The bank also said it would continue consultations and maintain an open dialogue with all institutions in the economic sector. Brazil and Mexico Are other countries in Latin America working on building their own CBDCs as well.
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