Chile could be the next Latin American country to support Bitcoin and other cryptos, one way or another. Currently, lawmakers are engaged in legislation that could make Bitcoin a legal method of payment while also embracing the idea of creating the country’s very own CBDC.
Just a month ago, in early November, Congressman Karim Bianchi created an initiative that had the goal of recognizing and regulating the usage of Bitcoin and other cryptos as legal methods of payment in Chile. The law wanted to offer the legal space needed for other regulatory developments, like banks having crypto custody services.
A week ago, Congress passed the proposal under the Commission of Economy and Development and it goes straight to the point. It has only four articles and its goal is to regulate Bitcoin as a method of payment that is “valid in any transaction and in any capacity that private natural or legal persons require to carry out.”
Not only does the legislation recognize Bitcoin as a valid method of making payments, but it also establishes that the exchange rate for a Bitcoin is to be decided by free-market mechanisms and that prices can be expressed in Bitcoin in the country – mentioning the price in Chilean pesos remains obligatory.
The founder of Blockchain Summit Latam and Blockchain Academy Chile, Cristobal Pereira, said that the proposal wants to continue debating Bitcoin at a macro level: “If this were a truly, fully developed bill, the goal would be the use of Bitcoin for individuals and businesses as a means of payment.”
Meanwhile, one of Chile’s neighboring countries, Bolivia, has made the usage of Bitcoin illegal.
But unlike other countries in the region that have an unstable economy, like Venezuela, El Salvador, or Argentina, Chile isn’t in that situation.
As Cristobal Pereira stated:
“Chile is a fairly stable economy, with recognized financial institutions and inflation within normal parameters,” so “there would not be much of a need for Bitcoin as a financial haven rather than a mere speculative asset.”
Pereira doesn’t believe that Bitcoin would become legal tender in the country and said that Chile will probably adopt a model similar to that of Japan, which accepts Bitcoin payments, but not as a legal tender.
The government of Chile is also taking into consideration a CBDC. This autumn, the central bank of Chile even assembled a team that has the goal of working on a CBDC beginning with 2022 as a method of helping the economy.
Pereira commented:
“A CBDC is already underway. Clearly, the more conservative politicians are going to say that you don’t need to express prices in Bitcoin if you are already going to develop a CBDC.”