Chile

Retail_Trading_Status

Allowed-Regulated Unknown

Analysis ID: #178
Version: Archived
Created: 2025-04-12 06:53
Run: aca39cbd...
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Workflow Stage: Live

Executive Summary

Retail cryptocurrency trading is permitted and regulated in Chile, primarily under Law No. 21.521, the "Fintech Law," with the Comisión para el Mercado Financiero (CMF) as the main regulator. The Fintech Law defines crypto assets and mandates registration, authorization, and AML/CFT compliance for crypto service providers. While the Banco Central de Chile (BCC) does not recognize crypto as legal tender, it permits their use in transactions by agreement, reflecting a balanced approach to fostering innovation and managing risks.

Key Pillars

Primary Regulator: Comisión para el Mercado Financiero (CMF) - oversees and regulates crypto asset services.
AML/CFT Compliance: Mandatory, including KYC procedures and reporting suspicious transactions to the UAF.
Registration and Authorization: Required for entities providing regulated crypto services, as per CMF's General Rule No. 502.

Landmark Laws

Law No. 21.521 (Fintech Law): Published January 2023. Defines 'virtual financial assets or crypto assets' and establishes a regulatory framework for financial technology, including crypto activities. Mandates registration and authorization for crypto service providers.

Considerations

Crypto assets are defined as digital representations of value, goods, or services (excluding money). Gains from crypto trading are taxed as income by the SII.
The Banco Central de Chile (BCC) warns of risks like volatility and lack of sovereign backing.
There are no legal impediments to using crypto for transactions if agreed upon conventionally.
The Comisión para el Mercado Financiero (CMF) has established that, under the current legal framework, cryptocurrencies cannot be considered 'values'.

Notes

Before the Fintech Law, the regulatory landscape was less defined, with banks sometimes closing accounts of crypto exchanges, leading to legal challenges.
The CMF was expected to issue detailed secondary regulations within 18 months (potentially by mid-2024), but progress has been gradual.
Retail adoption remains relatively low, though regulated investment funds offering crypto exposure are emerging (e.g., BTG Pactual Hashdex Nasdaq Crypto Index Fund).
The Banco Central de Chile (BCC) has explored the possibility of a Central Bank Digital Currency (CBDC).

Detailed Explanation

Retail cryptocurrency trading in Chile is permitted and regulated, primarily through Law No. 21.521, the "Fintech Law," enacted in January 2023. This law defines 'virtual financial assets or crypto assets' as digital representations of value, goods, or services (excluding money), which can be digitally transferred, stored, or exchanged. The Comisión para el Mercado Financiero (CMF) is the key regulatory authority overseeing crypto asset services, including alternative transaction systems (e.g., crypto exchanges), investment advisory, custody, order routing, and brokerage. Entities offering these services must register with the CMF and obtain authorization, as outlined in General Rule No. 502. AML/CFT compliance, including KYC procedures and reporting suspicious transactions to the Financial Analysis Unit (UAF), is mandatory for crypto companies. The Servicio de Impuestos Internos (SII) taxes gains from cryptocurrency trading as income. Investor protection measures include information disclosure, operational capacity, corporate governance, risk management, and capital adequacy requirements. The Banco Central de Chile (BCC) does not consider cryptocurrencies as legal tender or foreign currency and has warned about their risks (e.g., volatility), but acknowledges that individuals can use them for transactions by mutual agreement. The BCC has also explored a Central Bank Digital Currency (CBDC) and reiterated its stance against Bitcoin as a reserve asset. Before the Fintech Law, the regulatory landscape was less defined, with instances of banks closing crypto exchange accounts leading to legal challenges. The CMF was expected to issue detailed secondary regulations within 18 months (potentially by mid-2024), but progress has been gradual. Despite regulatory advancements, retail adoption remains relatively low, though regulated investment funds offering crypto exposure, such as the BTG Pactual Hashdex Nasdaq Crypto Index Fund (registered with the CMF), are emerging.

Summary Points

## Retail Cryptocurrency Trading Status in Chile: Regulatory Overview

**I. General Status:**

*   **Allowed-Regulated:** Retail cryptocurrency trading is permitted but increasingly regulated.

**II. Key Regulatory Bodies & Roles:**

*   **Comisión para el Mercado Financiero (CMF):**
    *   Primary financial markets regulator.
    *   Oversees and regulates services related to crypto assets.
    *   Responsible for registration and authorization of crypto service providers.
*   **Banco Central de Chile (BCC):**
    *   States cryptocurrencies are not legal tender or foreign currency.
    *   Issues warnings about risks associated with crypto assets (volatility, lack of sovereign backing).
    *   Acknowledges no legal impediments to using crypto assets for transactions by mutual agreement.
    *   Exploring the possibility of a Central Bank Digital Currency (CBDC).
    *   Reiterated stance against considering Bitcoin as a reserve asset.
*   **Servicio de Impuestos Internos (SII):**
    *   Chile's internal revenue service.
    *   Gains from cryptocurrency trading are considered income and subject to taxation.
*   **Financial Analysis Unit (UAF):**
    *   Receives reports of suspicious transactions related to AML/CFT compliance.

**III. Key Legislation & Regulations:**

*   **Law No. 21.521 (Fintech Law):**
    *   Primary legislative effort providing a framework for financial technology, including crypto assets.
    *   Defines "virtual financial assets or crypto assets" as digital representations of value, goods, or services (excluding money) that can be transferred, stored, or exchanged digitally.
*   **General Rule No. 502 (CMF):**
    *   Outlines requirements for registration and authorization of financial service providers in the CMF's Registry of Financial Service Providers.

**IV. Requirements for Compliance:**

*   **Registration and Authorization:** Entities providing regulated crypto services must register with the CMF and obtain authorization.
*   **AML/CFT Compliance:**
    *   Implement Know Your Customer (KYC) procedures.
    *   Report suspicious transactions to the UAF.
*   **Taxation:** Declare and pay taxes on profits from cryptocurrency trading.
*   **Investor Protection Measures:**
    *   Information disclosure requirements.
    *   Operational capacity requirements.
    *   Corporate governance requirements.
    *   Risk management requirements.
    *   Capital adequacy requirements.

**V. Notable Restrictions & Limitations:**

*   **No Legal Tender Status:** Cryptocurrencies are not legal tender or foreign currency in Chile.
*   **CMF Stance on 'Value':** Cryptocurrencies are not considered "values" under the current legal framework.
*   **Volatility and Risk Warnings:** The BCC warns about the high volatility and risks associated with crypto assets.

**VI. Recent Developments & Changes:**

*   **Fintech Law Implementation:** The CMF is in the process of issuing detailed secondary regulations for the crypto sector.
*   **CMF Deadline:** The CMF had an 18-month deadline (potentially ending mid-2024) to create a clearer regulatory framework, but progress has been gradual.
*   **Regulated Investment Funds:** Regulated investment funds offering crypto exposure are becoming available (e.g., BTG Pactual Hashdex Nasdaq Crypto Index Fund).
*   **Central Bank Digital Currency (CBDC):** The BCC is exploring the possibility of a CBDC.

Full Analysis Report

Report: Retail Cryptocurrency Trading Status in Chile

Topic: Retail_Trading_Status
Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status: Allowed-Regulated

2. Detailed Narrative Explanation:

Retail cryptocurrency trading is permitted in Chile and is increasingly subject to regulation following the enactment of Law No. 21.521, commonly known as the "Fintech Law," published in January 2023. This law represents Chile's primary legislative effort to provide a framework for financial technology, including activities involving crypto assets.

Key Regulatory Aspects:

Definition of Crypto Assets: The Fintech Law defines "virtual financial assets or crypto assets" as "digital representations of units of value, goods or services, with the exception of money, whether in national or foreign currency, which can be transferred, stored or exchanged digitally." This definition provides a legal basis for recognizing and regulating these assets within the financial system.
Regulatory Authority: The law designates the Comisión para el Mercado Financiero (CMF), Chile's primary financial markets regulator, as the key authority for overseeing and regulating services related to crypto assets.
Regulated Activities: The Fintech Law explicitly regulates several services involving crypto assets, including:
- Alternative Transaction Systems (e.g., crypto exchanges)
- Investment Advisory Services
- Custody of Financial Instruments (including crypto assets)
- Order Routing
- Brokerage of Financial Instruments
Registration and Authorization: Entities providing these regulated crypto services must register in the CMF's Registry of Financial Service Providers and obtain authorization from the CMF to operate legally in Chile. General Rule No. 502, issued by the CMF, outlines the requirements for this registration and authorization process.
AML/CFT Compliance: Companies operating in the crypto market are required to comply with Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) regulations. This includes implementing Know Your Customer (KYC) procedures and reporting suspicious transactions to the relevant authorities (like the Financial Analysis Unit - UAF).
Taxation: Gains obtained from the buying and selling of cryptocurrencies are considered income and are subject to taxation according to the rules established by the Servicio de Impuestos Internos (SII), Chile's internal revenue service.
Investor Protection: While the Fintech Law aims to foster innovation, it also incorporates measures for investor protection, including requirements for information disclosure, operational capacity, corporate governance, risk management, and capital adequacy for regulated entities.
Central Bank Position: The Banco Central de Chile (BCC) has stated that cryptocurrencies are not legal tender or foreign currency in Chile. It has issued warnings about the risks associated with crypto assets, such as high volatility and lack of sovereign backing. However, the BCC also acknowledges that there are no legal impediments to individuals using crypto assets for transactions if agreed upon conventionally. The BCC has also explored the possibility of a Central Bank Digital Currency (CBDC). Recently, the BCC reiterated its stance against considering Bitcoin as a reserve asset due to its volatility and associated risks.

Historical Context and Nuance:

Before the Fintech Law, the regulatory landscape for cryptocurrencies in Chile was less defined. While not explicitly banned, activities faced ambiguity. There were instances of banks closing accounts of crypto exchanges, leading to legal challenges. The Fintech Law provides a more structured, albeit still developing, regulatory environment. It aims to balance innovation and financial inclusion with stability and investor protection. While the law sets the framework, the CMF is still in the process of issuing detailed secondary regulations for the sector. Some sources note that the CMF had an 18-month deadline (potentially ending mid-2024) to create a clearer regulatory framework, but progress has been gradual. Despite the regulatory advancements, adoption among the general retail population in Chile remains relatively low compared to other Latin American countries or global benchmarks, although regulated investment funds offering crypto exposure are becoming available.

3. Relevant Text Excerpts:

(Fintech Law Definition): "The Law 21.521, known as 'Ley Fintec', is the first regulation in our jurisdiction that recognizes and defines virtual financial assets, also called crypto assets." (Alessandri Abogados)
(CMF Role): "The regulation of the crypto asset market is part of the role exercised by the Commission for the Financial Market (CMF), as well as supervision and regulations." (FinteChile, quoting Jaime Vera, finance expert)
(Regulated Services): "Consequently, activities linked to crypto assets, such as their maintenance, channeling of purchase and sale orders, buying and selling on behalf of third parties, and the provision of platforms for their negotiation, must comply with legal requirements and regulations established by the Commission for the Financial Market (CMF)." (Alessandri Abogados)
(Registration Requirement): "General Rule No. 502 mandates that financial service providers seek registration in the Registry of Financial Service Providers and obtain authorisation from the CMF to operate in Chile." (CMS Law)
(Taxation): "The Servicio de Impuestos Internos (SII) informed that taxes must be declared and paid on operations with cryptocurrencies, 'since the profits obtained in the activities of buying and selling cryptocurrencies are income subject to taxes'." (FinteChile)
(AML/CFT): "Currently, companies operating in the market must comply with anti-money laundering regulations, know their customers, and report suspicious operations." (FinteChile, quoting María Fernanda Juppet, CEO of CryptoMarket)
(Central Bank Stance): "The Banco Central de Chile (BCC) has indicated that crypto assets cannot be considered legal tender or foreign currency... However, the BCC has indicated that in Chile there are no impediments for people to conventionally agree to exchange goods or services for crypto assets." (Revista - PUCP)
(CMF Stance on 'Value'): "The Comisión para el Mercado Financiero (CMF) has established that, under the current legal framework, cryptocurrencies cannot be considered 'values'." (Banco Central de Chile, 2018 statement / Revista - PUCP)
(Regulated Funds): "The BTG Pactual Hashdex Nasdaq Crypto Index Fund is a public investment fund for retail investors... the only fund registered with the Comisión para el Mercado Financiero (CMF)." (Nasdaq / BTG Pactual)

4. Source Links:

FinteChile (Feb 2025): https://www.fintechile.org/noticias/el-mercado-de-las-criptomonedas-en-chile-impacto-en-la-economia-regulacion-y-desafios-en-el-pais/
Alessandri Abogados (Jun 2023): https://www.alessandri.cl/regulacion-de-activos-financieros-virtuales-en-la-ley-fintec/
Dock (Mar 2023): https://dock.tech/es/blog/ley-fintech-de-chile/
Rankia (Feb 2025): https://www.rankia.cl/blog/analisis-ipsa/6273581-como-regula-mercado-criptomonedas-chile
BCN (Biblioteca del Congreso Nacional de Chile) (Dec 2024): https://obtienearchivo.bcn.cl/obtienearchivo?id=repositorio/10221/34876/5/BCN_Regulacion_de_criptoactivos_VF.pdf
CMS Law: https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/chile
Revista - PUCP: https://revistas.pucp.edu.pe/index.php/themis/article/download/24733/23323/91150
CMF Presentation (Mar 2024): https://www.cmfchile.cl/portal/principal/613/articles-33714_doc_pdf.pdf
Banco Central de Chile (Apr 2018 Warning): https://www.bcentral.cl/contenido/-/detalle/el-consejo-de-estabilidad-financiera-advierte-al-publico-sobre-los-riesgos-asociados-a-la-adquisicion-y-tenencia-de-las-denominadas-criptomonedas
DiarioBitcoin (Dec 2024 - BCC on Reserves): https://www.diariobitcoin.com/paises/sur-america/chile/banco-central-de-chile-descarta-a-bitcoin-como-activo-de-reserva-para-su-tesoreria/
BTG Pactual: https://www.btgpactual.cl/asset-management/inversiones-alternativas/criptomonedas
Nasdaq (Oct 2022 - BTG Fund): https://www.nasdaq.com/articles/btg-pactual-launches-first-public-crypto-fund-for-investors-in-chile

## Report: Retail Cryptocurrency Trading Status in Chile

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

**1. Current Status:** `Allowed-Regulated`

**2. Detailed Narrative Explanation:**

Retail cryptocurrency trading is permitted in Chile and is increasingly subject to regulation following the enactment of Law No. 21.521, commonly known as the "Fintech Law," published in January 2023. This law represents Chile's primary legislative effort to provide a framework for financial technology, including activities involving crypto assets.

**Key Regulatory Aspects:**

*   **Definition of Crypto Assets:** The Fintech Law defines "virtual financial assets or crypto assets" as "digital representations of units of value, goods or services, with the exception of money, whether in national or foreign currency, which can be transferred, stored or exchanged digitally." This definition provides a legal basis for recognizing and regulating these assets within the financial system.
*   **Regulatory Authority:** The law designates the Comisión para el Mercado Financiero (CMF), Chile's primary financial markets regulator, as the key authority for overseeing and regulating services related to crypto assets.
*   **Regulated Activities:** The Fintech Law explicitly regulates several services involving crypto assets, including:
    *   Alternative Transaction Systems (e.g., crypto exchanges)
    *   Investment Advisory Services
    *   Custody of Financial Instruments (including crypto assets)
    *   Order Routing
    *   Brokerage of Financial Instruments
*   **Registration and Authorization:** Entities providing these regulated crypto services must register in the CMF's Registry of Financial Service Providers and obtain authorization from the CMF to operate legally in Chile. General Rule No. 502, issued by the CMF, outlines the requirements for this registration and authorization process.
*   **AML/CFT Compliance:** Companies operating in the crypto market are required to comply with Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) regulations. This includes implementing Know Your Customer (KYC) procedures and reporting suspicious transactions to the relevant authorities (like the Financial Analysis Unit - UAF).
*   **Taxation:** Gains obtained from the buying and selling of cryptocurrencies are considered income and are subject to taxation according to the rules established by the Servicio de Impuestos Internos (SII), Chile's internal revenue service.
*   **Investor Protection:** While the Fintech Law aims to foster innovation, it also incorporates measures for investor protection, including requirements for information disclosure, operational capacity, corporate governance, risk management, and capital adequacy for regulated entities.
*   **Central Bank Position:** The Banco Central de Chile (BCC) has stated that cryptocurrencies are not legal tender or foreign currency in Chile. It has issued warnings about the risks associated with crypto assets, such as high volatility and lack of sovereign backing. However, the BCC also acknowledges that there are no legal impediments to individuals using crypto assets for transactions if agreed upon conventionally. The BCC has also explored the possibility of a Central Bank Digital Currency (CBDC). Recently, the BCC reiterated its stance against considering Bitcoin as a reserve asset due to its volatility and associated risks.

**Historical Context and Nuance:**

Before the Fintech Law, the regulatory landscape for cryptocurrencies in Chile was less defined. While not explicitly banned, activities faced ambiguity. There were instances of banks closing accounts of crypto exchanges, leading to legal challenges. The Fintech Law provides a more structured, albeit still developing, regulatory environment. It aims to balance innovation and financial inclusion with stability and investor protection. While the law sets the framework, the CMF is still in the process of issuing detailed secondary regulations for the sector. Some sources note that the CMF had an 18-month deadline (potentially ending mid-2024) to create a clearer regulatory framework, but progress has been gradual. Despite the regulatory advancements, adoption among the general retail population in Chile remains relatively low compared to other Latin American countries or global benchmarks, although regulated investment funds offering crypto exposure are becoming available.

**3. Relevant Text Excerpts:**

*   **(Fintech Law Definition):** "The Law 21.521, known as 'Ley Fintec', is the first regulation in our jurisdiction that recognizes and defines virtual financial assets, also called crypto assets." (Alessandri Abogados)
*   **(CMF Role):** "The regulation of the crypto asset market is part of the role exercised by the Commission for the Financial Market (CMF), as well as supervision and regulations." (FinteChile, quoting Jaime Vera, finance expert)
*   **(Regulated Services):** "Consequently, activities linked to crypto assets, such as their maintenance, channeling of purchase and sale orders, buying and selling on behalf of third parties, and the provision of platforms for their negotiation, must comply with legal requirements and regulations established by the Commission for the Financial Market (CMF)." (Alessandri Abogados)
*   **(Registration Requirement):** "General Rule No. 502 mandates that financial service providers seek registration in the Registry of Financial Service Providers and obtain authorisation from the CMF to operate in Chile." (CMS Law)
*   **(Taxation):** "The Servicio de Impuestos Internos (SII) informed that taxes must be declared and paid on operations with cryptocurrencies, 'since the profits obtained in the activities of buying and selling cryptocurrencies are income subject to taxes'." (FinteChile)
*   **(AML/CFT):** "Currently, companies operating in the market must comply with anti-money laundering regulations, know their customers, and report suspicious operations." (FinteChile, quoting María Fernanda Juppet, CEO of CryptoMarket)
*   **(Central Bank Stance):** "The Banco Central de Chile (BCC) has indicated that crypto assets cannot be considered legal tender or foreign currency... However, the BCC has indicated that in Chile there are no impediments for people to conventionally agree to exchange goods or services for crypto assets." (Revista - PUCP)
*   **(CMF Stance on 'Value'):** "The Comisión para el Mercado Financiero (CMF) has established that, under the current legal framework, cryptocurrencies cannot be considered 'values'." (Banco Central de Chile, 2018 statement / Revista - PUCP)
*   **(Regulated Funds):** "The BTG Pactual Hashdex Nasdaq Crypto Index Fund is a public investment fund for retail investors... the only fund registered with the Comisión para el Mercado Financiero (CMF)." (Nasdaq / BTG Pactual)

**4. Source Links:**

*   **FinteChile (Feb 2025):** https://www.fintechile.org/noticias/el-mercado-de-las-criptomonedas-en-chile-impacto-en-la-economia-regulacion-y-desafios-en-el-pais/
*   **Alessandri Abogados (Jun 2023):** https://www.alessandri.cl/regulacion-de-activos-financieros-virtuales-en-la-ley-fintec/
*   **Dock (Mar 2023):** https://dock.tech/es/blog/ley-fintech-de-chile/
*   **Rankia (Feb 2025):** https://www.rankia.cl/blog/analisis-ipsa/6273581-como-regula-mercado-criptomonedas-chile
*   **BCN (Biblioteca del Congreso Nacional de Chile) (Dec 2024):** https://obtienearchivo.bcn.cl/obtienearchivo?id=repositorio/10221/34876/5/BCN_Regulacion_de_criptoactivos_VF.pdf
*   **CMS Law:** https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/chile
*   **Revista - PUCP:** https://revistas.pucp.edu.pe/index.php/themis/article/download/24733/23323/91150
*   **CMF Presentation (Mar 2024):** https://www.cmfchile.cl/portal/principal/613/articles-33714_doc_pdf.pdf
*   **Banco Central de Chile (Apr 2018 Warning):** https://www.bcentral.cl/contenido/-/detalle/el-consejo-de-estabilidad-financiera-advierte-al-publico-sobre-los-riesgos-asociados-a-la-adquisicion-y-tenencia-de-las-denominadas-criptomonedas
*   **DiarioBitcoin (Dec 2024 - BCC on Reserves):** https://www.diariobitcoin.com/paises/sur-america/chile/banco-central-de-chile-descarta-a-bitcoin-como-activo-de-reserva-para-su-tesoreria/
*   **BTG Pactual:** https://www.btgpactual.cl/asset-management/inversiones-alternativas/criptomonedas
*   **Nasdaq (Oct 2022 - BTG Fund):** https://www.nasdaq.com/articles/btg-pactual-launches-first-public-crypto-fund-for-investors-in-chile

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