Issuance Of Chile’s Electronic Peso Postponed
The launch of Chile’s electronic Peso, which was originally scheduled to begin in the early months of 2022, has now been delayed so that the country’s central bank can complete further research and compile it into a report.
The Bank of Chile has decided to postpone its plans to issue a CBDC, stating that the electronic Peso needs a more in-depth review of its advantages and hazards, and they have promised a fresh report before 2023.
A preliminary analysis of a CBDC was included in a report that was issued by the bank and published on the 11th of May. It investigated the present payment method in use in the nation, as well as the advantages, disadvantages, and fundamentals of introducing a virtual peso.
The bank noted that although the existing payment system “functions effectively” and has adapted successfully to recent obstacles,” a CBDC would improve and prevent any risks associated with the digital revolution.
Chile’s Central Cites Issue Of Fraud And Inadequate Information
The bank believes there is not enough info to make a definitive judgment about the issuance of a virtual Peso. As a result, it will “carry a series of presentations, meetings, and seminars with various counterparts. This will help the central bank to make a more informed choice.
In September last year, the Chilean central bank stated that it would produce a plan with suggestions and choices for deploying a CBDC in 2022. At the same time, it established a group to investigate the possibility of an electronic Peso.
The bank expressed its concerns regarding the widespread use of cryptocurrencies in the nation. It cited the possibility of cryptocurrencies being used in illegal activities such as money laundering. Also, it stated that cryptocurrencies might even impede access of banks to funds if they are substituted for banks.
According to the data presented by Statista, Chile ranked 18th worldwide for crypto adoption in 2021. In addition, fourteen percent of respondents from Chile noted that they used or owned cryptocurrency during the same year. This places the country as the fourth highest user of cryptocurrency in South America.
Although Chile does not restrict the use or trading of crypto, the country shares the concerns of most South American nations over crypto. In May, Argentina’s central bank, Chile’s neighbor, intervened to prevent two commercial banks from offering cryptocurrency services, citing the need to “mitigate the dangers that crypto presents.”
Brazil is another country that is considering regulating the cryptocurrency industry. A law pending in Brazil from 2015 to establish a regulatory body to monitor the cryptocurrency market is yet to be approved.