The Central Bank of Chile is exploring the creation of a central bank digital currency (CBDC).

The bank will form a team to analyze the objectives, requirements and regulations for the development of a CBDC, Central Bank President Mario Marcel said in a statement Wednesday.Any possible currency would be issued in a similar way to banknotes and coins, and could be used for transactions in commerce or between individuals, or for financial institutions to settle peer-to-peer payments, the central bank said.The group aims to deliver a white paper in the first quarter of 2022, presenting a framework for action and strategic objectives, lines of action and expected results.The team, led by central bank board member Alberto Naudon, also plans to generate a medium-term strategy for digital payments in Chile. It will analyze private digital means of payment and crypto assets, retail payments and payment infrastructures, among other topics.The development of CBDCs “faces a series of challenges greater than those of issuing physical or fiat money in matters such as the provision of credit in the economy, financial stability and the privacy of information on people’s financial transactions,” the central bank said.