Chile and Cryptocurrency
Chile Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
There is currently no statutory or regulatory regime that governs the use of cryptocurrencies. The Central Bank of Chile has advised that crypto-assets are neither legal tender money nor foreign currency. Nonetheless, cryptocurrencies are clearly in wide use in Chile.
In 2018, the Chilean Supreme Court held in favor of Bancoetado, a state-owned bank, following its closure of accounts of cryptocurrency exchange, Oironx, citing money laundering and terrorism financing concerns. The Chilean Supreme Court’s ruling, however, also characterized cryptocurrency as an “intangible asset”–citing a lack of a “physical manifestation” and purporting that such currencies “ha[s] no intrinsic value”– thereby exempting crypto-assets from Chile’s Value Added Tax laws. In 2019, the Chilean government reversed course, seeking to tax crypto-related investments.
In April of 2019, the Chilean government introduced
Since then, both the Central Bank of Chile and the Santiago Stock Exchange have announced the incorporation of blockchain technologies.
Chile’s Commission for the Financial Market (CMF) recently proposed legislation that references digital assets. The draft, however, provides that “[I]t should be noted that this project does not include regulation of those digital assets that are used as a means of payment, a matter that the CMF is working together with the Central Bank.”
The Central Bank of Chile (BCC)
The Servicio de Impuestos Internos (SII), Chile’s tax agency,
According to an unofficial statement from the Central Bank of Chile, virtual currencies have no specific legal recognition in the country, and trade and transactions involving cryptocurrency are not subject to the regulation or supervision of the monetary authority.[39]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Do you have questions about cryptocurrency, digital currencies, or blockchain technology? Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[39] Claudia Ramírez, El Avance de las Monedas Virtuales en Chile: Cuatro Empresas Transan Más de US$ 7 Millones Mensuales y Suman Casi 20 Mil Clientes [The Advance of Virtual Currency in Chile: Four Companies Transact More than US$ 7 Million Monthly and Adds Almost 20 Thousand Clients], Economía y Negocios (July 2, 2017), article archived at Perma.cc.
