face high costs for their remittances when using traditional methods based on a structure of correspondent entities. an alternative option that is being used, although because of its nature is not possible to have detailed information, are remittances based on cryptoassets. while these remittances may be faster and even cheaper, they are outside of the regulatory perimeter and thus their customers are exposed to several risks ( counterparty, liquidity, operational ). the cross - border use of cbdc would reap the benefits of crypto - based methods, without their risks. certainly, this would require coordination between the central banks involved. 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

purpose, or retail, and wholesale. for retail use, the motivations in emerging economies are mainly to reduce cash in circulation, or promote electronic payments, foster financial inclusion, and reduce informality and tax evasion. on the other hand, the motivations for wholesale use are mainly efficiency and security. we could also mention cross - border payments as a motivation for either of the two categories as well. in terms of the benefits, i can mention the following : a. some research indicates that dlt may enhance market efficiency. dlt registers based on real user identities can improve competition, price transparency and liquidity. b. crisis management around the zero lower bound. in a world of low real interest rates, the impact of unconventional monetary policies, such as qe, nominal gdp targeting and forward guidance, appears to be limited ( blanchard, dell ’ ariccia and mauro, 2013, gagnon and sack, 2018 ). fixing negative nominal interest rates in a flexible way could improve the central banks ’ toolkit ( rogoff, 2019 ). however, there page 6 of 11 central bank of chile september 2019 are some drawbacks. the general public could interpret negative interest rates as a new tax and probably legislators would restrict it ( rogoff, 2019 ). also, price and wage rigidity can persist, due to habitconsumption, market power, organizational inertia, information frictions. continuing with the benefits : c. in a world with a widely used cbdc, commercial banks could be smaller / less systemic. cbdcs can give central banks more intervention tools and reduce the risk of runs ( kumhof and noone, 2018 ). d. transparent balance sheets can make it easier to unwind troublesome financial institutions and divest their assets. e. monetary policy channels in a world with cbdcs may be faster and more powerful. today monetary policy works by affecting the balance sheets of banks and some financial intermediaries, which do not pass on all the rate changes to final users due to market power and other frictions. if central banks can reach out to more and more agents ( businesses, households ), then their role will become ever more central and effective. page 7 of 11 central bank of chile september 2019 lastly, use of cbdcs could be explored as a more efficient alternative for remittances. in chile, immigration has had a sharp increase in few years. as in other parts of the world, they