Authorities will evaluate options for a Chilean digital currency in early 2022, according to the Central Bank. The “digital peso” should compete with similar currencies that are being created. With the move, Chile seeks to join an international trend under which markets are increasingly focusing on such currencies.
The Central Bank of Chile aims to launch a digital currency early next year. Although the exact strategy and details on the “digital peso” are still lacking, central bank president Mario Marcel said a working group is studying the currency and seeking to make it competitive in an “increasingly challenging payments industry.”
As over 40 percent of Chilean households use digital payment systems, including credit cards and transfers, Marcel highlighted the need for a digital currency. “From objectives linked to the needs of the public, financial stability, and effectiveness of monetary policy, the Central Bank will define … a proposal with options and requirements for an eventual issuance of a digital peso in Chile,” he said.
Another reason for digital currencies is the increase in financial crime and the international growth of, among others, cryptocurrencies. Central American country El Salvador introduced earlier this year Bitcoin as legal tender, while China has banned cryptocurrency trading. Other countries such as Chile, are looking for possibilities of creating their own digital currencies to keep up with the trend.
Editor-In-Chief Boris van der Spek is the founder of Chile Today.