Felipe Larraín, Chile’s Minister of Finance tabled a bill aimed at regulating the fintech and cryptocurrency sectors, in an effort to provide guidelines in the country.
Larraín proposed the bill to Congress and he reportedly came up with the bill after visiting the United States. During that visit, he noted that U.S regulators implemented requirements that are designed to be proportional to businesses. This means that the regulations factor in the different business models of each company and the different services that they offer.
The bill aims to streamline the cryptocurrency market making it safer for investors
The recently introduced bill, therefore, aims to offer flexible regulation in Chile’s cryptocurrency and fintech industry if it becomes law. Ahora Noticias, a local news outlet reported that flexibility will be one of the key aspects of the bill, especially in the fast-paced industry. The report also noted that numerous cryptocurrency exchanges have operations in Chile but there are currently no regulatory guidelines to govern them.
“Regulation of these platforms would mitigate some of the risks, such as money laundering and terrorist financing, and increase the legal certainty with which they operates,” stated Larraín.
The announcement about the proposed bill follows the views of the Central Bank of Chile which believes that cryptocurrencies will never substitute fiat currency. The bill officially represents the first time that the Chilean Government is involving itself with the cryptocurrency market in the country. Its involvement will certainly help bring a sense of order in the market through guidelines that will help protect investors from fraud and illegitimate practices.
The battle between Chilean banks and cryptocurrency exchanges
Chilean have been quite unwelcoming to cryptocurrency-related businesses that operate in the country. In 2018, banks distanced themselves from anything to do with crypto-related firms, meaning they could not access regular fiat banking services. However, cryptocurrency exchanges came together and took the battle to court to counter the decision made by the banks. The case was handled by an anti-monopoly court which granted the win to the exchanges, thus forcing the banks to continue offering their banking services to crypto firms.