Chile’s Blockchain Revolution

Chile's capital city, Santiago.

Like much of Latin America, Chile has not been averse to the adoption of new blockchain technologies and the large-scale development of cryptocurrency regulations by the state. With increasing use of cryptocurrency in the country and the continent at large, the Chilean government has kept a keen eye on global cryptocurrency trends. Cryptolydian analyses Chile’s blockchain developments.

Cryptocurrency regulations

In April 2019, Chilean Finance Minister Felipe Larraín announced the government planned to introduce legislation to monitor and regulate cryptocurrency, reported Cointelegraph. The aim was to curb money laundering and the financing of terrorist groups.

At the same time, cryptocurrency users must start paying tax on digital assets. Many developing countries have since followed suit, including South Africa and other BRICS countries.

Chilean cryptocurrency today

A year later, in April 2020, Chile recorded its highest ever trading volume of digital currency, reported Cointelegraph.

Analysts note that the increase in cryptocurrency usage came in correlation with the depreciation of the Chilean peso. Similar trends have also been seen in neighbouring Argentina. As the fiat currency in Argentina depreciated and the finance sector destabilised, more and more people viewed cryptocurrency as a stable alternative to investments and asset management.

Meanwhile, the Covid-19 pandemic caused a major fluctuation of financial trends in Chile, leading to hardship in most quarters. However, an increase in cryptocurrency trading might encourage more capital flow into the economy. This could also mitigate the aftereffects of the pandemic.

As fellow Latin American neighbours like Argentina and Mexico continue to see increasing cryptocurrency use, Chile will likely follow suit. More and more cryptocurrency exchanges have been opening in the country. The most popular one at the moment is Orionx.

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Raïs Tarek 87 Articles
Journalist and lawyer, with a passion for global politics, economics and current affairs.