Chile Central Bank: Crypto Needs Legal Framework to Substitute Fiat

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Traditional money will not be substituted by cryptocurrencies in near future, stated the Central Bank of Chile (Banco Central de Chile, BCC) in a comprehensive report on digital assets.

The report was made on a special request of the Tribunal de Defensa de la Libre Competencia (TDLC). The document can be considered official as it was signed by Mario Marcel, president of the central bank. TDLC is an independent anti-monopoly institution established by the Chilean government to ensure the non-violation of free competition rules in Chile.

According to the report, Bitcoin and other cryptocurrencies are still in early stages of development. They are represented as alternatives to fiat currency. However, at the moment, it is uncertain whether they will be able to evolve in near future or not. BCC noted that it is skeptical regarding the future of blockchain industry.

The report maintained that there is no evidence pointing towards the possibility of digital assets replacing fiat currency. In order to achieve this target, relevant regulations and legal framework have to be established at first.

The key parameters hindering the mass adoption of digital assets are: limited acceptance, slow payments, and volatility, stated the report. BCC also noted that the share of the crypto market in Chile is almost negligible as compared to conventional money.

In the report, BCC has hinted at the possible framework for crypto regulations. It is expected that digital assets will be regarded as intangible assets and a digital representation of value. Therefore, without any additional restrictions, digital assets will be used to purchase goods and services.

However, Chile has been unable to introduce a lucid legal framework for digital assets. However, after this report, it seems that the government intends to take the issue more seriously.


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