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The post <a href="https://coinpedia.org/cryptocurrency-regulation/crypto-regulations-in-chile-2024/" rel="noopener noreferrer nofollow">Crypto Regulations In Chile 2024</a> appeared first on <a href="https://coinpedia.org" rel="noopener noreferrer nofollow">Coinpedia Fintech News</a>
Chile, situated in the western side of South America, is known for stability and prosperity. With its capital, Santiago, shining as the economic heart of the country, it boasts a powerful high-income economy. It enjoys leading positions in various global rankings, from economic freedom to competitiveness. One exciting development is the introduction of the Ley Fintec, which is a Fintech Law. The law is expected to transform the economic framework of the country using various possibilities of technology, including the possibility of digital finance. It is extremely significant for the cryptocurrency sector.&nbsp;
Here, we cover everything you should know about the present crypto regulatory environment in Chile. Excited? Please read on!&nbsp;&nbsp;&nbsp;
<h2 class="wp-block-heading" id="h-1-crypto-regulation-in-chile-a-general-overview-nbsp">1. Crypto Regulation in Chile: A General Overview&nbsp;</h2>
Chile’s approach to cryptocurrency regulation has taken a significant step forward with the introduction of the Fintech Law or the Ley Fintec. The law sets out clear guidelines for activities involving crypto assets, such as crypto exchanges, investment advice and custody services. To ensure proper oversight, the Financial Market Commission (CMF) introduced General Rule No. 502 in early 2024. The rule requires financial services providers to register and obtain authorisation from the CMF. The Ley Fintec empowers the Central Bank of Chile to issue regulations, in order to ensure the security and reliability of the digital assets.&nbsp;
<h2 class="wp-block-heading" id="h-2-ley-fintec-the-fintech-law-in-chile-nbsp">2. Ley Fintec: The FinTech Law in Chile&nbsp;</h2>
The introduction of the Ley Fintec is an important step in the history of Chile, especially when we consider its financial landscape. The law was approved by the Chile Congress in October 2022, and it was enacted in January 2023. What makes the law special is the fact that it targets the modernisation of the country’s banking and payment sectors. Promoting financial innovation and inclusion is the strategy it proposes to achieve the targeted modernisation. The main aspect of the law is the introduction of an Open Financial System. What it says about fintech companies and cryptocurrencies is vital to understand, as it allows us to understand how the country sees these sectors. The law brings regulations for fintech companies and payment initiation service providers. This means that these companies and service providers are required to meet standards for security and reliability. In the sector of crypto, the law provides rules for exchanges.&nbsp;&nbsp;
<h2 class="wp-block-heading" id="h-3-crypto-regulation-in-chile-amp-prime-activity-areas-nbsp">3. Crypto Regulation in Chile &amp; Prime Activity Areas&nbsp;</h2>
Exchange, Custody, Borrowing and Yield are the four prime activity areas in the crypto sector. Let’s have a look at how the Chile crypto regulation framework regulates these four key activity areas.&nbsp;&nbsp;
Exchange: The FinTech Law regulates crypto exchanges. They are categorised as alternative trading systems. Only those exchanges, which have authorisation from the Financial Market Commission, are allowed to operate.&nbsp;
Custody: Crypto services are also regulated under the FinTech Law. Like exchanges, custody providers are also required to register and get authorisation from the CMF.&nbsp;
Borrowing: There are currently no specific guidelines issued by regulators regarding borrowing in the crypto sector in Chile.
Yield: Similarly, yield-related activities, like earning interest on crypto holdings, are also unregulated in the country.&nbsp;&nbsp;
<h2 class="wp-block-heading" id="h-4-crypto-regulation-in-chile-what-s-new-nbsp">4. Crypto Regulation in Chile: What’s New&nbsp;</h2>
Here are the latest developments in Chile in the crypto regulation front.&nbsp;
December 22, 2023: The Tribunal de Defensa de la Libre Competencia resolved a legal dispute, ruling against crypto exchanges Buda.com, CryptoMKT, and OrionX in their case against Chilean banks.
April 22, 2024: The Central Bank of Chile announced plans for proof-of-concept testing for a digital peso, moving closer to launching a Central Bank Digital Currency.
July 1, 2024: The IShare Bitcoin Trust was listed on the Santiago Stock Exchange. This allows Chilean investors to access the sector of spot Bitcoin ETFs.
July 5, 2024: Tools For Humanity, operator of Worldcoin, changed its data collection policies&nbsp; in Chile to exclude children and adolescents from providing biometric data.&nbsp;
<h2 class="wp-block-heading" id="h-5-crypto-taxation-framework-in-chile-explained-nbsp">5. Crypto Taxation Framework in Chile Explained&nbsp;</h2>
Let’s understand the crypto taxation framework in Chile.&nbsp;
Individuals: An individual needs to declare the profit he has made from crypto trading, as profits from trading cryptos are subject to the Global Complementary or Additional Tax.&nbsp;
Businesses: They must treat crypto profits as income, subject to general taxes like the First Category Tax and Global Complementary or Additional Tax.
Service Providers: If you are offering crypto services, you must charge Value Added Tax (VAT) on your commissions. This means that service providers are required to issue invoices.
Exchanges: crypto exchanges have additional responsibilities, like filling the Annual Affidavit No. 1891. In the affidavit, they are required to detail all trades and related operations. They must also adhere to first-category taxpayer obligations.&nbsp;&nbsp;
<h2 class="wp-block-heading" id="h-6-timeline-of-crypto-regulation-evolution-in-chile">6. Timeline of Crypto Regulation Evolution in Chile</h2>
Here is the timeline of Crypto Regulation Evolution in Chile.&nbsp;
June, 2016: The Financial Market Commission clarified that crypto assets are not regulated as securities but can be used as a means of exchange if both parties agree.&nbsp;
February, 2019: The Central Bank of Chile issued a memo stating that while crypto assets can be used for exchange and investment, they are not considered legal tender.&nbsp;
May 2022: The Central Bank of Chile released a preliminary report exploring the potential issuance of a central bank digital currency (CBDC).
October 2022: The Chilean Congress approved the FinTech Law or the Ley FinTec.&nbsp;
January 2023: The law was enacted, establishing a regulatory framework for financial innovation.
<h2 class="wp-block-heading" id="h-endnote">Endnote</h2>
In 2024, Chile is forging ahead as a trailblazer in crypto regulation across Latin America. With new laws in place, the country aims to provide clarity and stability for digital asset ventures. The regulatory framework promises to foster a robust environment for innovation in blockchain technology. The pioneering effort positions Chile at the forefront of regional crypto adoption, offering a potential model for other nations looking to navigate the evolving landscape of digital finance.&nbsp;
Also Read : <a href="https://coinpedia.org/cryptocurrency-regulation/crypto-regulations-in-canada-2024/" target="_blank" rel="noopener noreferrer nofollow">Crypto Regulations in Canada: Key Updates for 2024</a>

Crypto Regulations In Chile 2024

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