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Tuesday, September 27, 2022

Chile Central Bank To Go Slow Until End-2022 To Decide On Rollout Of Digital Currency

The Central Bank of Chile will decide this year on the strategy for its expected rollout of the South American nation’s digital currency. It has delayed the rollout to go in for more analysis and to inform a new report by the end-2022.

With policymakers worldwide struggling to keep up with the bewildering pace at which cryptocurrencies are spreading. Global regulators are regularly coming down on crypto instruments, even as the market has expanded beyond $2 trillion by April. China too revealed that it was outlawing the mining and trading of cryptocurrencies.

Chile Has Set Up A High-Profile Body To Study The Crypto Market

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The president of the Central Bank of Chile, Mario Marcel revealed before national legislators that he had set up a high-profile operational group to help him study a strategy in the medium term for issuing a digital currency to satisfy the requirement of the increasingly demanding payments industry.

Marcel informed lawmakers that it will come up with a proposal that will detail the requirements and options for the eventual issue of Chile’s digital peso. It will take into account the objectives related to the needs of the public, the financial stability of the money market, and the effectiveness of the monetary policy.

The use of digital currency has zoomed in Chile, as over 40% of the consumption is routed through cards and similar financial instruments. Regulators around the world have expressed concern that the increasing use of private routes of payment could undermine the security of the monetary and financial system and promote blue-collar crimes.

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Marcel said that his group would evaluate carefully the risks involved in the banking system in Chile and the robustness and efficiency of its financial and monetary policy. The country is comparatively better than other South American nations and has maintained one of the most stable financial and banking industries in South and Central America.

While Chile does not prohibit the use or trade of cryptocurrencies, it is concerned with the lack of control and transparency. Neighboring Argentine also stepped in last week and stopped a couple of banks from dealing in crypto services. It reasoned that it needed time to study the risk the currency poses.

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