Crypto Assets and CBDCs in Latin America and the Caribbean: Opportunities and Risks
Maximiliano Appendino, Olga Bespalova, Rina Bhattacharya, Jean François Clevy, Nan Geng, Takuji Komatsuzaki, Justin T. Lesniak, Weicheng Lian, Sandra Regina de Souza Marcelino, Mauricio Villafuerte, Yorbol Yakhshilikov · IMF Working Paper · 2023
After providing a general overview of the nature, pros, and cons of crypto assets and CBDCs, this paper focuses on documenting their recent experience in LAC. The region records a high interest in unbacked crypto assets and stablecoins and its authorities’ policy responses have varied substantially, ranging from the introduction of Bitcoin as legal tender in El Salvador to their prohibition in many other countries worried about their impact on financial stability, currency/asset substitution, tax evasion, corruption, and money laundering. This paper also describes briefly the results of a survey on CBDCs’ introduction plans and crypto assets regulation. Finally, this paper presents some general lessons and policy recommendations for the region on the regulation of cypto assets, digital currencies and cross-border payments, and on the potential introduction of CBDCs.