This article is from es.cointelegraph.com and the original article can be read here
The Central Bank of Chile has delayed its plans for a central bank digital currency (CBDC) saying the issuance of a digital Chilean peso requires a deeper analysis of the benefits and risks, promising a new report towards the end of the year.
A report of the bank published on May 11 includes a preliminary assessment of a Chilean CBDC and explores the country’s current payment system along with the benefits, risks and principles of issuing a digital peso.
The bank stated that while the current payment system “works well” and has been able to “adapt well to recent challenges”, a CBDC would improve and mitigate any risk of digital transformation, adding:
“A CBDC would contribute to a competitive, innovative and integrated payment system that is inclusive, resilient and protects people’s information.”
Regarding the issuance of a digital peso, the bank considers that there is not enough information to make a final decision and “will carry out a series of seminars, presentations and meetings with different counterparties” to inform the new report.
In September 2021, the Central Bank of Chile said that it would create a strategy with proposals and options for a CBDC deployment in early 2022 and formed a working group to study the potential digital weight.
The bank outlined its concern regarding the adoption of cryptocurrencies in the country, citing the potential for the use of cryptocurrencies in money laundering, illicit activities, and the ability to disrupt banks’ access to finances if used as an alternative to bank deposits.
“The issuance of a CBDC is also a good alternative to face the challenges associated with the potential massification of the so-called virtual currencies, which, although for now they have a very small role in the payment system, could alter the functioning of the financial market and transmission of monetary policy if its use becomes widespread.”
Chile ranks 18th in the world in cryptocurrency adoption in 2021 according to figures from Statista with 14% of Chilean respondents saying they owned or used cryptocurrency that year, it also marks Chile as the fourth largest user of cryptocurrency in South America.
Chile does not prohibit the use and trade of cryptocurrencies, but joins other South American countries in their concern about cryptocurrencies. In early May, the central bank of its neighboring country, Argentina, intervened to prevent two banks offer services related to cryptocurrencies, claiming that it was necessary to “mitigate the risks posed by cryptocurrencies”.
Brazil is also considering regulation with a bill circulating since 2015 with the aim of creating a regulatory agency to oversee the cryptocurrency market, which Approaching Approval in mid-April.