A wholesale CBDC may have several benefits  • Cross-border use of a CBDC may be explored as a more efficient alternative for remittances • Remittances using a structure of correspondent institutions are expensive and usually take time to settle. On the other hand, crypto-based alternative may be more efficient, but they are unregulated and have risks. • The cross-border use of CBDC would reap the benefits of crypto-based methods, without their risks. It certainly would require coordination between the central banks involved. On the other hand, some concerns have still not been fully addressed: a. Development and management costs of a CBDC, specially a retail CBDC that is available for a large number of people, can be substantial. Technical capacity is still not mature enough, and risks of cyberattacks are exacerbated. b. The level of anonymity that the CBDC should have is still a matter of discussion. In digital networks it can be easy to identify anonymous users due to their links to non-anonymous nodes, such as large companies. The public is already frightened by how much sensitive individual information is stored (NSA, Uber, Google, Facebook…), it is possible that a CBDC could create anonymity concerns. Page 8 of 11  Central Bank of Chile September 2019  c. Some of these concerns end up in a discussion about which is the optimum design features: anonymous or pseudo-anonymous? Interest bearing? Guaranteed convertibility of bank deposits into CBDCs?
d. Finally, there are some additional risks to take into account: Reputational risk if CBDC is not widely adopted by the public, or if privately issued currencies gain more traction; Financial exclusion of the “nontech” persons? Even though many CBDC experiences are from developed economies such as Canada and Sweden, there are also some experiments in developing economies such as China, Colombia and Uruguay. For emerging economies, where persons tend to be financially underserved, is CBDC the most efficient way to solve this problem? Other alternatives, such as fast payments solutions, can be evaluated. Page 9 of 11  Central Bank of Chile September 2019  In conclusion: a. Blockchain technology implies opportunities and concerns that should be carefully addressed: Which is the goal of technology adoption? b. This is especially important in the case of CDBC: financial inclusion, response to new forms of e-money, facilitate wholesale payments, faster payments, cross-border payments? c. CDBC does not necessarily need blockchain. Our understanding is that DLT or Blockchain technologies are more useful when several participants of a given system need to have access to a ledger of information and/or when participants do not necessarily trust each other (and therefore proof of work requirements make the register almost immutable). However, when a Central Bank issues its currency -- either in physical or digital format -- trust should be a given. Also is far from obvious that all market participants should have access to sensitive information such as all transactions in which the CBDC was used.