Issuing a digital Chilean peso by the Central Bank of Chile has been postponed until a more thorough assessment of the advantages and hazards. A fresh report is expected before the end of the year. A preliminary review of a Chilean CBDC was included in a May 11 report from the bank. There was a discussion of the country’s present payment system and the advantages, hazards, and principles of introducing a digital peso.
Might Pose Threat to Financial Stability
Despite the present payment system working effectively and “adapt well to recent challenges,” the bank indicated that a CBDC would improve and alleviate any risks associated with digital transformation. There isn’t enough information to make a definitive judgement on the digital peso, so the bank plans to “carry out a series of seminars, presentations and meetings with different counterparts” to get the necessary information for the following report.
Chile’s central bank said in September 2021 that it would organize a working group to explore the potential digital peso and develop a plan for launching a CBDC in early 2022. According to the bank, using crypto as an alternative to bank deposits might pose a threat to the financial stability of the nation, according to the bank, which expressed its worry about the rise of crypto usage in the country.
Cryptocurrencies are not banned in Chile, but the government is concerned about their usage and sale. To “mitigate the risks crypto poses,” Argentina’s central bank intervened to block two banks from selling cryptocurrency services in early May.