Chile is making significant strides towards the potential launch of a Central Bank Digital Currency (CBDC), with a notable public backing for the initiative. Despite not yet committing fully to the introduction of a digital peso, the Central Bank of Chile (BCCh) is poised to start Proof-of-Concept (PoC) testing, signaling a more concrete step towards digital currency adoption.
Public and Sectoral Support for the Digital Peso
Recent activities by the BCCh include conducting a comprehensive survey involving the general public and representatives from both public and private sectors. The survey results revealed a strong support for the CBDC initiative, with nearly 90% of respondents expressing a favorable view towards conducting pilot tests for the digital peso.
"The main objective of the PoC tests is to gain experience with technologies associated with digital currencies," a BCCh spokesperson stated. Initially, these tests are set to be conducted internally within the central bank, without external support from the private sector. The BCCh plans to seek external collaboration only when it moves towards real-world testing phases or is ready for an official rollout.
Competition from Stablecoins Rather Than Cryptocurrencies
Alberto Naudon, an advisor to the central bank, downplayed the potential competition from traditional cryptocurrencies like Bitcoin (BTC). He suggested that the likelihood of cryptocurrencies being adopted as mainstream methods of payment was minimal. Instead, Naudon highlighted the competitive threat posed by stablecoins, particularly those backed by large corporations, noting their potential for significant mass adoption due to their stable characteristics.
The media also points out that in the Latin American region, USD-pegged stablecoins are used more frequently than Bitcoin, underscoring the preference for more stable digital assets.
A Shift in Policy Direction
The BCCh's current exploration of a CBDC marks a notable shift from its earlier stance. In 2022, the bank had started and then abandoned a similar project, citing uncertainties about the benefits of proceeding with a digital peso. However, the positive response from the recent survey has prompted a reconsideration, aligning Chile’s central bank with the global trend where numerous nations, particularly in the Latin American region, are either preparing to launch CBDCs or actively researching them.
This renewed interest from the BCCh reflects a broader global movement among central banks to integrate digital currencies into their financial systems, suggesting that Chile may soon join the ranks of countries pioneering the transition to digital fiat currencies.
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