Chile postpones launch of national cryptocurrency

The Central Bank of Chile has postponed the launch of its own digital currency, saying it requires a deeper study of the market, as well as a greater understanding of the benefits and risks. The bank plans to provide a new report closer to the end of 2022.

The bank’s report, published on May 11, included a preliminary assessment of the Chilean CBDC. It examined the country’s current financial system, as well as the benefits, risks, and principles of issuing a digital peso.

The bank stated that while the current payment system is «performing adequately» and has been able to «adapt well to recent challenges,» the CBDC will strengthen and mitigate any risks, adding: «The CBDC will contribute to the creation of a competitive, innovative and integrated payment system that is inclusive, sustainable and protects people’s personal data.»

Regarding the issuance of the digital peso, the bank believes that there is not enough information to make a final decision and will «hold a series of workshops, presentations and meetings with various counterparties» and report on the outcome in a new report.

The postponement of the decision on the introduction of the currency is probably also related to the panic that has been observed in the cryptocurrency markets since early May. In September 2021, the central bank of Chile announced that it would develop a strategy with proposals and options for deploying CBDC in early 2022 and formed a working group to explore the potential of the digital peso.