Chile’s CBDC will operate both offline and online before launch as Governor Rosanna Costa said, noting the bank should carefully analyze the CBDC before integrating it into the financial system of the country so let’s read more today in our latest cryptocurrency news.
The Chilean central bank withdrew its plans to release a CBDC by the end of 2022 because it was supposed to conduct research and more analysis on the product before moving to the launch. Banco Central de Chile published a report focused on the country’s current monetary network and learn about the risks and benefits of issuing a digital version of its national currency. The central bank was quite optimistic about a financial product of this kind, beliving it can enhance the economic system and will ensure consumer protection:
“A CBDC would contribute to achieving a competitive, innovative and integrated payment system that is inclusive, resilient and protects people’s information.”
The bank argued that the Chilean peso could be a good alternative to cryptos like BTC which could eventually be employed in criminal operations:
“The issuance of a CBDC is also a good alternative to face the challenges associated with the potential massification of 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 the transmission of monetary policy if its use becomes widespread.”
On the other hand, the bank held back from the intention to roll out a CBDC by the end of 2022 and Governor Rosanna Costa said that Chile’s CBDC will operate both offline and online before actually getting integrated into the country’s network. She also added that the Chilean authorities should create a system to trace these CBDC transactions. The Chilean digital peso will likely be convertible with cash and collaborate with the commercial banks and provide secure transactions. Once the bank finishes the research and solves the issues, it will decide whether to launch the CBDC and also promised to release a report on the matter by the end of the year.
Introducing the digital version of the national currency was a mission for many central banks around the world in the past few years. The research conducted by the Bank of International Settlements revealed that 90% of the institutions are working towards releasing such a proejct. About 50% of them are in the middle of developing experiments on CBDC. Countries like Malaysia, China, Nigeria, and Thailand are the leaders in the field and their authorities are in favor of central bank digital currencies and carry out projects to popularize them.
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