Presently, cryptocurrencies are entirely unregulated in Chile, and are not legally recognized as a means of exchange or securities. But there are also no impediments for people to conventionally accept to exchange goods or services for crypto actives.
The Chilean central bank president, Mario Marcel, has made a comment seemingly in favor of developing a regulatory apparatus for virtual currencies to regulate and monitor activities pertaining to Chile’s cryptocurrency sector.
Marcel said “Incorporating a regulation would allow having a registry of the participants in these activities and thus have information to monitor the associated risks,” adding 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.”
He warned that developing an ad hoc regulatory apparatus could risk providing a false “sense of security” whilst failing to effectively manage associated risks.
Still, Marcel questioned whether or not a regulatory framework for virtual currencies is warranted in Chile, stating “Considering that these assets exist in the country, there is an associated industry and people who own them, it is questionable if it would be appropriate to change this situation.”
The apparent openness on the part of the Chilean administration to developing a regulatory apparatus for cryptocurrencies comprises a significant a departure from the recent banking embargo experienced in Chile.
In March 2018, two Chilean cryptocurrency exchanges, Buda and Crypto Mkt, requested clarity on the position of the country’s banking association regarding virtual currencies after numerous banks suddenly terminated their accounts with the exchanges. At the beginning of April 2018, both exchanges, in addition to a third exchange, Orionx, received notice from Banco del Estado de Chile (Banco Estado) that their accounts with the country’s sole state bank would soon be closed.
In mid-April 2018, the Buda appealed against the account suspensions, and was successful, with Chile’s anti-monopoly court ordering two of ten banks to re-open Buda’s accounts.
The verdict led to the Chilean Minister of Economy, Development, and Tourism, José Ramón Valente, issuing a statement seeking to emphasize the government is “not in favor [of] or against [cryptocurrencies], but simply see them as another innovation. In sum, despite the fact that Chile is one of the most technologically progressive countries on the American continent is very supportive of business and innovation, it is in regulatory limbo with digital currencies. There is some tension between the cryptocurrency community and the banking industry, with cases of Chilean cryptocurrency exchanges having had bank accounts frozen.
In response, they have been pleading for fair regulation so that the Association of Banks and Financial Institutions (ABIF) makes its position transparent. They have accused the Chilean regulators of being only a few who want to prohibit access to the technology for the majority.
There are no official blockchain regulation documents on offer. However, it appears as though blockchain is already being integrated into several industries in Chile, notably in energy.
On April 5, 2018 the Chilean National Energy Commission (CNE) announced that it had launched the nation’s first blockchain project. Originally teasing the project in February 2018, the commision said it wants to energy statistics directly onto the blockchain, to improve the security of energy data by utilizing blockchain technology.
The reports that have been released suggest that Chile is very open to blockchain technology as a mechanism to “augment levels of security, integrity, traceability and confidence in the information available to the public.” Susana Jimenez, Chile’s energy minister, said in a statement: “we are interested in taking this technology from a conceptual level to a concrete case, understanding that it’s considered to be the most disruptive technology of the last decade by world-class experts, and that it could be a part of day-to-day life in the next few years.”
It will be interesting to see if they look to implement blockchain in other areas of the government.
There are no official blockchain regulation documents on offer.
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