More and more banks in Latin America are considering issuing their own central bank digital currencies (CBDC).
The Central Bank of Chile reported that it is considering the opportunities and disadvantages that a digital peso issuance could bring.
The report, titled “Central Bank Digital Currency Issuance in Chile,” also looks at the different forms such a currency could take.
The document, authored by the bank’s payments group, was “drafted in the context of the growing digitalization of payments, which has been driven by rapid technological advances and the emergence of new instruments and players in the payments market.”
The issuance of CBDC will increase the benefits associated with digital transformation, while mitigating some of the risks.
In particular, the CBDC could contribute to the development of a more competitive, innovative, integrated, inclusive and sustainable payment system, the group concluded.
The report calls for further analysis of the balance of costs and benefits of issuing such a currency. At the same time, it notes that there are no standards or guidelines that have been tested in practice for the implementation of the project.
At the same time, it is recognized that the digitization of currency may cause unintended negative consequences for the national economy. Nevertheless, the central bank believes that the time has come to tackle this challenge and start working on its technical capabilities, as well as moving forward with projects aimed at testing different implementations of the currency.
Other countries in Latin America Brazil and Mexico are also working on their own CBDC.