Chile close to launching its own CBDC

Chile is moving cautiously towards the launch of a central bank digital currency (CBDC), with the public apparently firmly behind the central bank’s plans. According to media platform Criptonoticias, the Central Bank of Chile (BCCh) has not yet made a final commitment to the launch of a CBDC.

Nevertheless, the rollout of a digital peso seems increasingly likely, as the BCCh has announced that it will soon conduct Proof-of-Concept (PoC) testing.

The central bank also conducted a survey. She asked “the general public and representatives from the public and private sectors” for their opinion on CBDC. The BCCh indicated that almost 90% of survey respondents had a “positive attitude towards CBDC” pilots.

The bank stated that “the main purpose of the PoC tests” is to “gain experience in technologies related to digital currencies.” BCCh officials said the first tests would be conducted internally, without support from the private sector. The bank added that it would only seek “external support” when it was ready to conduct real tests or roll out the currency.

Alberto Naudon, a central bank adviser, said it was unlikely that a Chilean CBDC would face much competition from “so-called cryptocurrencies.” Naudon said there was a very small chance that Bitcoin (BTC) or other tokens would be used as money or payment on a “mass scale.”

Instead, he said a digital peso would likely face more competition from stablecoins, some of which are “backed by big companies.” Naudon said that “because of their characteristics,” stablecoins “clearly have the potential” to achieve “significant mass adoption.” The media platform noted that “in many countries” in the Latin America region, people use USD-pegged coins “more broadly than BTC.”

The bank, like many of its international counterparts, seems like something to have changed course regarding the CBDC policy. Back in 2022, the BCCh started a CBDC project, only to abandon it because it was unsure that continuing the rollout of a digital peso would be beneficial to the country.

But the bank appears to have changed its mind in 2024, stating that the response to its survey had convinced it to try the CBDC project again. The bank said it was “in line with the majority of the world’s central banks.”

Numerous countries around the world, including most major countries in the LATAM region, are either planning to roll out CBDCs or are actively exploring digital fiat projects.