The president of Chile’s central bank is reportedly open to regulating cryptocurrency with the expressed desire to monitor illegal activities.
Chile has been a supporter of blockchain technology in the past, but because of the risks of fraud, tax evasion, and theft, the Chilean banking industry has been opposed to financial institutions engaging in cryptocurrency-related transactions. The state even pressured for the closure of many cryptocurrencyexchange accounts, such as BUDA, Orionx, and Crypto MKT. A case brought by these cryptocurrency exchanges was appealed in April, but a final verdict has yet to be reached.
However, on May 14, Chilean newspaper El Economista reported that the president of Chile’s central bank, Mario Marcel, had announced that he was open to regulating cryptocurrency in Chile – with the intention of monitoring and reducing risks associated with the digital assets. This is a position that seems to be a reaction to the uncertainty and volatility involved with digital currency.
While he did not issue specific cryptocurrency guidelines, by regulating cryptocurrency in Chile, Marcel hopes to improve “market transparency, consumer protection, and prevention of money laundering and terrorist financing.” Marcel also stated that having a registry will allow authorities to better track those who would use cryptocurrency for malicious purposes.
Although there are no laws prohibiting private citizens from using cryptocurrency to purchase goods and services, Chile’s current legal system does not recognize digital currency as either money or as a security.
In a statement, Marcel reiterated the central bank of Chile’s hesitation about cryptocurrency, claiming “regulation could provide a false ‘sense of security’ that could lead the public to underestimate the risks associated with [cryptocurrency].”