Despite earlier stated aspirations to have a proposal ready by early this year, Chile is still debating whether to move forward with a central bank digital currency (CBDC).
Chile’s central bank indicated in a preliminary report released on May 11 that it needs more time to decide whether or not to issue a CBDC. Last September, Reuters anticipated that the decision will be made around the beginning of this year.
The central bank wrote in the report’s Spanish-language executive summary:
“The bank considers that there is still not enough information to make a final decision with respect to the issuance of a CBDC. However, considering its high potential, and that international experience shows that it is a process that may require years of study and testing, it is considered appropriate to continue with activities oriented toward the future implementation of this new form of money.”
According to the central bank, the first stage of the process entails gathering information from parties interested in the CBDC process and “exploring ideas” for developing pilot projects or tests that will help it better understand the challenges of creating a CBDC.
It’s unclear when the central bank will make a decision on a CBDC, but it looks that the matter will be studied for the remainder of the year.
“There are still no clear international standards” for CBDCs, according to the central bank. Because the viability of a CBDC as a payment mechanism is dependent on how widely it is used, the bank will first interact with public and private institutions interested in participating.
The bank said:
“In this context, the bank has decided to carry out during this year a round of dialogue and consultations with different interested agents, the details of which will be announced shortly,”
While the use of cryptocurrencies is now “very limited,” the bank highlighted in its report that their potential expansion as a payment mechanism has made them an important aspect of the CBDC debate.
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