The Current State of Chile’s Cryptocurrency Regulations

One of the things that made cryptocurrencies popular is its ability to take out third parties when it comes to doing transactions. In the grand scheme of things, it was a disruptive idea in the world of finance.

Unfortunately, it doesn’t sit well with many regulators considering that blockchain technology can be exploited by criminals in their illicit activities. There are also instances of hacks that make the market risky. In 2017, Bitcoin skyrocketed its price to almost $20,000 right before the end of the year. However, things looked bearish after regulators took a stand against cryptos.

China was one of the very first that made their move against cryptocurrencies. By the time 2018 entered, many regulators have followed from South Korea to Japan.  Though at this time, there is no agreed consensus between regulators how to treat cryptocurrencies.  In fact, in the US, there is yet another clampdown on crypto-related businesses in order to take out fraudulent activities.

Regulating Cryptos in Chile

The president of Chile’s Central Bank, Mario Marcel has been considering to regulate digital currencies in the country. Currently, Chile doesn’t view cryptocurrencies as money or as securities. And also, there are no laws that are in place to stop citizens from exchanging their cryptos for goods and services.

During the forum of the Finance Commission of Deputies, Marcel mentioned that “incorporating regulation will allow having a registry of participants in these activities and thus have information to monitor the associated risks”.

He further elaborated the importance of regulations when it comes to the crypto world saying that “These activities could be developed under more robust standards and mechanisms, especially in terms of market transparency, consumer protection, and prevention of money laundering and terrorist financing”.

Clear Position on Crypto

At the end of March, Buda and Crypto MKT, a Chile-based crypto exchange company asked the Chilean Association of Banks (ABIF) to provide a clear position when it comes to cryptocurrencies and its trading. This was after some accounts were closed by the Chilean bank.

And by mid-April, Buda, Orionx, and Crypto MKT went further by appealing to the court regarding the closure. It was seen by some that it was an attempt by the bank to curtail the progress of the crypto industry. And by the end of April, their attempts became effective. Chile’s anti-monopoly court has ruled that Buda’s accounts should be reopened at state bank Banco del Estado de Chile and Itau Corpbanca.

Ministry of Economy and Its Support to Cryptos

Chile’s Minister of Economy, Development, and Tourism, Jose Ramon Valente also supports cryptocurrencies. According to reports, he “gave a signal of support to cryptocurrencies and those who operate them in Chile”.

He mentioned that “we cannot stay out of these innovations”. However, he clarifies that he isn’t taking sides between cryptos and banks. He said that he views cryptocurrencies simply as “another innovation and we favor that there is this innovation and that Chile does not close before the possible technological advances in the world”.

This is good news in Chile’s crypto industry. Considering the openness seen among regulators and government officials regarding blockchain technology, this could potentially lead to increased popularity of digital currencies in the country.