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Chile is preparing to launch its own digital currency for the first time

The Chilean Central Bank is taking firm steps towards developing and launching its own digital currency, and the President of the Central Bank, Mario Marcel, participated in a digital meeting, yesterday, Thursday, to discuss this development.

"Innovation in the financial industry: a push for financial revitalization and inclusion" on the creation of a working group focused on creating a digitization strategy for the Chilean economy, Marcel said during the digital meeting, according to the Argentine newspaper "Infobay".

And the institution stated in a press statement that this group will among its tasks evaluate “the objectives, requirements and controls for developing a digital currency issued by the Central Bank.”

The text says that this coin "will be issued in a manner similar to bills and coins". Likewise, it states that this digital currency is “used so that people can pay in stores, or alternatively, so that financial institutions can settle payments between their peers.”

The newspaper pointed out that the working group, to be led by Chancellor Alberto Naudon, should "create a medium-term strategy on digital means of payment in the country", for which they will consider retail, wholesale, cross-border and private digital payments.

The Central Bank of Chile, in its publication, argues that central bank digital currencies, known as CBDCs, "are of global interest and research because they have the potential to facilitate various public policy objectives."

In the case of Chile, the central bank considers that the digital currency can bring improvements in the “security and flexibility of payments.” It would also provide more choices for citizens and facilitate sending money across Chilean borders, as well as "enhance financial inclusion".

However, they also warned of a series of challenges they could face when taking the step of issuing their digital currencies to the central bank. They rated these challenges as "greater than those related to the issuance of physical or credit money in matters such as the provision of credit in the economy, financial stability, and the privacy of information related to people's financial transactions." So, says the Central Bank of Chile, it takes time and assessment.