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Chile’s Central Bank Considers Cryptocurrency Regulations to “Monitor Associated Risks”

Last Updated March 4, 2021 5:07 PM
Francisco Memoria
Last Updated March 4, 2021 5:07 PM

Chilean news outlet El Economista  has recently revealed that Mario Marcel, president of the country’s central bank, is considering implementing cryptocurrency regulations, which would give the financial institution information to “monitor associated risks.”

Speaking at a forum during the Finance Commission of Deputies, Marcel admitted that the current process that cryptocurrency adopters go through in the country isn’t optimal and questioned whether proper regulations would change things.

The central bank official pointed out that cryptocurrencies aren’t currently considered money, currency, or securities in Chile. He added that this also means both individuals and businesses can freely accept cryptocurrency payments in exchange for goods and services, as there are no barriers. He was quoted as saying (roughly translated):

“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.”

Marcel added that Chile’s central bank monitors cryptocurrency developments throughout the world, and their potential of being used to evade taxes and launder money when regulations aren’t stopping bad actors. Per his words, proper regulations would “allow having a registry of the participants in these activities and thus have information to monitor associated risks.”

He added:

“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,”

cryptocurrency regulations
Chilean cryptocurrency exchanges have struggled to find willing banking partners

The official cautioned, however, that regulations could also give would-be investors a “false sense of security” that would see them underestimate the risks associated with cryptocurrencies.

Earlier this year, as covered by CCN.com, Chilean cryptocurrency exchanges Buda and Crypto MKT asked the country’s banking association, Asociación de Bancos e Instituciones Financeras (ABIF), to clarify its stance on the cryptocurrency industry, after they started dealing with a banking blockade that saw financial institutions shutter their accounts.

The country’s exchanges, including Orionx, decided to take the case to an appeals court, as they hadn’t been given a proper explanation for the blockade, with only state-owned Banco del Estado de Chile revealing it decided “not operate with companies that are dedicated to the issuance or creation, brokerage, intermediation or serve as a platform for the so-called cryptocurrencies.”

Last month, Chile’s anti-monopoly court ordered two major Chilean banks, Banco del Estado de Chile and Itau Corpbanca, to re-open Buda’s accounts, presumably to prevent what looked like a blanket ban on the country’s cryptocurrency industry. The exchange’s lawsuit against 10 Chilean banks, including the two ordered to re-open accounts, is ongoing.

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