Chile has recently undergone a significant political transformation. Following a decisive runoff election, José Antonio Kast, a conservative former congressman and leader of the Republican Party, secured the presidency with a substantial majority. This shift represents Chile's most pronounced move to the right since its return to democracy, signaling a potential new era for the nation. Markets reacted positively to Kast's victory, interpreting it as a promise for deregulation. The Chilean peso and local equities gained strength, fueled by expectations of more flexible labor laws, reduced corporate taxes, and a renewed focus on law and order, addressing concerns about crime and migration that were central to his campaign.
Kast's appeal resonated deeply with Chileans grappling with security issues and stagnant economic growth. His platform combined a pledge to "restore order" with promises to invigorate private investment, particularly within the crucial copper sector. While he tempered some of his previous hard-line stances to attract center-right voters in a politically split Congress, his initial message after the election was one of unity. However, the political landscape ahead suggests that change will likely be incremental rather than revolutionary.
Globally, Kast's campaign leveraged a regional trend of leaders who have built their brands on strong security rhetoric and promises of deregulation. He openly cited El Salvador's Nayib Bukele as an inspiration for tackling crime, and his comparisons to a "tough on crime" governance style struck a chord with Chileans frustrated by organized crime and migration challenges. Furthermore, Argentina's libertarian president Javier Milei promptly met with Kast in Buenos Aires shortly after the vote, highlighting a clear ideological alignment across the Andes. Yet, despite these shared leanings, each leader faces unique domestic constraints.
Chile's Distinct Path: Beyond the “Bukele Moment”
This political backdrop naturally prompts a critical question for the crypto community: Does a rightward shift in Chile put the nation on a Bukele-style path for Bitcoin? The short answer, when considering Chile's robust institutions and market structure, is no. The more comprehensive and globally relevant answer reveals a fascinating divergence.
It is certainly tempting to draw parallels with El Salvador. In 2021, President Nayib Bukele made history by declaring Bitcoin legal tender, a pioneering political statement that continues to capture international attention. Regardless of one's view on its outcomes, that decision was fundamentally a top-down, symbolic move. Chile's trajectory, by contrast, is far more likely to be bottom-up and technocratic, shaped predominantly by legal and technical considerations rather than swift political mandates.
The Billion-Dollar Signal: Chile’s Foundational Anchors
Three core anchors firmly differentiate Chile's approach to cryptocurrencies from El Salvador's bold gambit:
- A Cautious Central Bank: Chile's Central Bank (BCCh) has spent recent years engaging in the opposite of crypto-centric political theater. Instead, it has meticulously published sober analyses on Central Bank Digital Currencies (CBDCs) and, alongside the Financial Market Commission (CMF), has been implementing the comprehensive open-finance regime outlined in the Fintech Act. This level of deliberate, systematic engagement signals a commitment to caution and robust regulatory frameworks, not sudden, unprecedented moves like making a cryptocurrency legal tender.
- The Towering Pension System: Perhaps the most compelling differentiator, Chile's pension system represents an enormous pool of capital that demands prudent, regulated oversight. By the close of 2024, Chilean pension funds held an astounding $186.4 billion. This figure continued to climb, exceeding $207 billion by mid-2025 and reaching approximately $229.6 billion by October. These are assets that move only when strict boxes regarding governance, risk assessment, secure custody, and transparent valuation are meticulously ticked. This deeply ingrained system is designed to integrate new asset classes through established, regulated wrappers, not through presidential decrees or social media announcements.
- Existing Tax and Compliance Frameworks: Chilean tax and compliance regulations already categorize cryptocurrencies as an income-taxable asset. This pre-existing framework reinforces the expectation that any widespread adoption will naturally flow through formal intermediaries such as regulated brokers, investment funds, and traditional banks, rather than being driven by top-down mandates at the checkout counter.
This macro backdrop is precisely why Mauricio Di Bartolomeo, co-founder and CSO of Bitcoin lender Ledn, believes Chile's "crypto moment" will bear little resemblance to those witnessed in El Salvador or Argentina.
"I believe it is unlikely that the Chilean Central Bank and the new government will make an attempt to make Bitcoin legal tender in the country," Di Bartolomeo states. "The better fit, in his view, is incremental policy that normalizes usage."
He envisions practical steps, such as de minimis tax relief for small transactions and explicit permission for banks to offer custody and buy/sell services. The overarching goal, according to Di Bartolomeo, is to enable citizens and companies to hold Bitcoin locally without legal ambiguity or regulatory uncertainty.
Building the Digital Rails: ETFs, Bank Custody, and Pension Potential
So, what forms of cryptocurrency adoption are most likely to emerge first on the ground in Chile?
"Local ETF products that let regulated entities get exposure," says Di Bartolomeo, pointing to the recent wave of spot Bitcoin ETFs abroad as a successful template.
In the United States, the launch of products like BlackRock's iShares Bitcoin Trust (IBIT) in January 2024 rapidly transformed Bitcoin into a portfolio-grade asset for traditional institutions. Chile does not need to reinvent the wheel; it simply needs to adapt these successful models into local regulatory wrappers and distribution channels.
Following local ETFs, the next critical gating factor involves bank rails. If the central bank and the CMF establish a clear set of permissions for bank-level custody and facilitation of crypto assets, broader everyday access will naturally follow. This includes seamless brokerage integration, the ability to include crypto in discretionary investment portfolios, collateralized lending services, and corporate treasury programs that can hold and hedge digital assets.
Chile has been systematic in constructing these foundational frameworks through its Fintech Act (Law 21,521) and the Open Finance System regulation, which began rolling out in mid-2024. This robust legal and technical infrastructure empowers banks to introduce new services without compromising essential risk controls or financial stability.
But what about the elephant in the room: the powerful pension funds (AFPs)? Di Bartolomeo's view is pragmatic. Pension funds are inherently rule-bound investment vehicles, frequently restricted from directly purchasing international funds or limited in how they can hold assets not domiciled within Chile. This is precisely why "jurisdictional opportunities" become so vital. If units of international spot ETFs are off-limits, he suggests that domestic ETFs or ETNs could provide the necessary bridge for AFPs to gain exposure. Even then, any initial allocations would start small, tightly governed by stringent custody standards, robust valuation methodologies, clearly defined risk buckets, and favorable tax treatment. These are the mundane, yet make-or-break, details that rarely generate headlines but are indispensable for institutional adoption.
The numbers vividly illustrate the stakes involved. A pension system that ended 2024 at $186.4 billion and continued its growth through 2025 does not need to allocate a large percentage for it to be significant. Even a modest 25 to 50 basis points sleeve via local wrappers could represent billions of dollars in potential capital flow over time. However, this also means regulators will demand impeccable custody segregation, unimpeachable price-source integrity, and stress-testable liquidity before the first basis point is invested.
Chile's approach to stablecoins also aligns perfectly with this "regulated rails" thesis. Recent legal analyses have highlighted how the existing Fintech Law framework can effectively recognize and channel stablecoin usage into the formal financial system. This careful, measured approach helps mitigate informal dollarization risks while preserving monetary control. Expect near-term clarity in this area to accelerate the development of retail-grade on-ramps for stablecoin usage.
Catalysts, Obstacles, and the Scoreboard to Watch
If the fundamental expectation is that regulated rails will come first, what factors could either accelerate or halt this process? Di Bartolomeo identifies several key potential deal-killers:
- Any central bank restrictions on domestic Bitcoin buy/sell activities.
- Punitive tax treatment specifically targeting Bitcoin investments.
- Significant limits on the usage of USD-pegged stablecoins.
Each of these scenarios, he argues, would inevitably push legitimate activity offshore or into the unregulated shadows, directly contradicting Chile's decade-long commitment to deepening and formalizing its financial markets.
Conversely, the catalysts for accelerated adoption are straightforward:
- Clear bank custody guidance from regulators.
- Green lights from securities regulators for local Bitcoin ETFs or ETNs.
- Well-defined, unambiguous compliance pathways for distribution.
On the policy scoreboard, there is already tangible motion. The BCCh has released two detailed CBDC reports (in 2022 and 2024), demonstrating a central bank that prioritizes deliberate, architectural planning over headline-grabbing experiments. The CMF, for its part, is actively executing a comprehensive 2025-2026 regulatory plan and has been progressively rolling out Open Finance rules since 2024. This ongoing work represents the legal and technical plumbing that makes secure, interoperable data sharing, and by extension, new financial products, possible.
None of these institutional actions suggest an imminent declaration of Bitcoin as legal tender. And what of the political landscape? Kast's victory, celebrated by regional conservatives and swiftly followed by a bilateral meeting with Argentina's libertarian president Javier Milei, certainly sets a deregulatory tone. However, the Chilean system remains one that channels significant change through its established institutions. Markets rallied on the election result, Congress remains split, and the new government's first hundred days will likely be defined by its ability to navigate the complex rule-making process, not by sweeping monetary experiments.
The Testable Signals for Broader Adoption
For those invested in the future of crypto in Chile, Di Bartolomeo's advice offers refreshingly testable signals. The earliest indications of broader adoption will likely manifest as official filings for local Bitcoin ETFs or ETNs. In quick succession, watch for traditional banks signaling their intent with basic custody and buy-and-sell capabilities for Bitcoin.
"A strong signal for broader adoption would be banks offering any Bitcoin-related services or products, or policy discussions around updating banking policies to allow for this," he suggests.
He believes this shift would normalize the holding and transacting of Bitcoin locally, free from legal ambiguity. From there, attention will naturally turn to the pension system. Any circulars that expand the eligible-asset menus for AFPs, or even simply clarify the valuation and safekeeping standards for digital assets, would open the door for small, carefully managed sleeves of exposure within Chile's largest pools of capital, especially if domestic wrappers simplify operational access.
On the retail and commerce front, narrowly drawn tax relief could significantly encourage experimentation without mandating it. Di Bartolomeo points to de minimis-style exemptions for small payments, currently debated in the US, as a model Chile could adopt to allow individuals to use and receive Bitcoin for everyday transactions. He also highlights stablecoins as a dynamic policy lever:
"I would also look at policies around usage of USD-pegged stablecoins like Tether, as these are increasingly being used as money in the region," a path he says could still funnel users toward Bitcoin over time.
Ultimately, Chile's crypto future will likely be shaped not by dramatic podium announcements, but by the intricate details within term sheets, regulatory rulebooks, and rigorous custody audits. While this path may not generate the same viral headlines as El Salvador's legal-tender rollout, it represents a more sustainable and scalable approach. As Di Bartolomeo aptly puts it:
"I don’t see an immediate case for Bitcoin to be used as money in Chile."
The true tell will be the actions of the banks. If they move forward, the substantial pension funds can follow later, and it will not take many basis points of allocation to significantly move the needle for Bitcoin in Chile.
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