Chile's $229B Signal: Why Bitcoiners Need to Look Beyond "Bukele"

Chile has undergone a significant political shift. José Antonio Kast, a conservative leader, won the presidency in December 2023, signaling a move towards deregulation and a focus on security. This change has naturally sparked questions within the crypto community: could Chile follow El Salvador’s path and adopt Bitcoin as legal tender? The answer, while nuanced, is largely no. Chile’s institutional framework, robust pension system, and existing tax regulations suggest a different, more measured approach to crypto adoption – one that prioritizes regulated rails and incremental policy changes over sweeping declarations.

Why Chile Isn't El Salvador – And That's a Good Thing

The comparison to El Salvador, which made Bitcoin legal tender in 2021, is tempting. However, El Salvador’s move was largely top-down and symbolic. Chile’s trajectory is likely to be bottom-up and driven by technical and legal considerations. Three key factors differentiate Chile from the Central American nation.

The Central Bank's Cautious Approach

Unlike El Salvador’s bold move, the Banco Central de Chile (BCCh) has adopted a cautious stance towards crypto. The BCCh has focused on analyzing Central Bank Digital Currencies (CBDCs) and implementing open-finance regulations through the Fintech Act, demonstrating a preference for careful consideration rather than impulsive adoption. This signals a commitment to stability and risk management.

The Weight of Chile's Pension System

Chile’s pension funds represent a massive $229.6 billion in assets as of October 2023, a figure that has grown from $186.4 billion at the end of 2024 and $207 billion by mid-2025. This substantial capital base is governed by strict regulations regarding governance, risk, and custody. Any integration of crypto assets will require regulated wrappers and thorough due diligence, not simply presidential decrees. This system absorbs new asset classes through established, regulated channels.

Existing Tax and Compliance Frameworks

Chile already treats crypto as a taxable asset, meaning adoption will likely flow through formal intermediaries like brokers, funds, and banks. This contrasts with El Salvador’s approach, which aimed to mandate crypto usage at the point of sale. The existing framework encourages a more structured and compliant integration of digital assets.

Incremental Adoption: The Path Forward for Crypto in Chile

Mauricio Di Bartolomeo, co-founder and CSO of Bitcoin lender Ledn, believes Chile’s “crypto moment” will differ significantly from El Salvador’s or Argentina’s. He anticipates incremental policy changes that normalize crypto usage rather than a push for legal tender status. This includes potential tax relief for small transactions and clear guidelines for banks to offer custody and buy/sell services, allowing citizens and companies to hold BTC locally without legal ambiguity.

Following the Rails: ETFs, Bank Custody, and Pensions

The initial steps towards wider crypto adoption in Chile will likely involve the introduction of local Exchange Traded Funds (ETFs). Inspired by the success of spot Bitcoin ETFs in the US, such as BlackRock’s iShares Bitcoin Trust (IBIT), Chile could create similar products tailored to the local market. This would provide regulated exposure to Bitcoin for traditional institutions.

The next crucial step is establishing clear regulations for bank custody and facilitation. If the central bank and the Comisión para el Mercado Financiero (CMF) provide a clear permission set, everyday access to crypto will follow, including integration with brokerage services, collateralized lending, and corporate treasury programs.

Chile’s Fintech Act (Law 21,521) and the Open Finance System regulation provide a solid foundation for these developments, enabling banks to add new services without compromising risk controls.

The Role of Pension Funds (AFPs)

While pension funds represent a significant potential source of capital, their integration into the crypto market will be gradual. Due to regulatory constraints, AFPs often face limitations on direct international investments and holding assets outside of Chile. However, domestic ETFs or Exchange Traded Notes (ETNs) could serve as a bridge, allowing AFPs to gain exposure to Bitcoin through regulated wrappers. Even a small allocation – 25-50 basis points – could represent billions of dollars in potential flow over time, but will require robust custody, valuation, and risk management standards.

Stablecoins and Regulatory Clarity

Chile’s approach to stablecoins aligns with its “regulated rails” thesis. Legal analysis suggests the Fintech Law framework can be used to recognize and channel stablecoin usage into the formal system, reducing the risks of informal dollarization while maintaining monetary control. Clarity on stablecoin regulations is expected to accelerate the development of retail-grade on-ramps to the crypto market.

Catalysts, Deal-Killers, and Key Metrics to Watch

While incremental adoption is the base case, several factors could accelerate or hinder progress. According to Di Bartolomeo, key deal-killers include central bank restrictions on domestic BTC trading, punitive tax treatment of crypto investments, and limitations on USD-pegged stablecoin usage. These would likely push activity offshore or into the shadows.

Conversely, catalysts include bank custody guidance, regulatory approval for local ETFs/ETNs, and clear compliance pathways for distribution. The BCCh’s two CBDC reports (2022 and 2024) demonstrate a commitment to deliberate architecture. The CMF’s 2025-26 regulatory plan and ongoing implementation of Open Finance rules are laying the legal groundwork for secure and interoperable data sharing.

Kast’s victory and his meeting with Argentina’s Javier Milei signal a deregulatory tone, but the Chilean system still relies on institutional processes. The first 100 days of his presidency will be defined by what the government can achieve through the rule-making process, not by radical monetary experiments.

Key Indicators to Monitor

• Filings for local Bitcoin ETFs or ETNs: This would be an early sign of progress.
• Bank announcements regarding custody and buy/sell capabilities: Indicates growing institutional acceptance.
• Regulatory updates regarding stablecoins: Will impact retail access and adoption.
• Updates to pension fund regulations: Could unlock significant capital flow.

Di Bartolomeo emphasizes that the future of crypto in Chile will be determined by term sheets, rulebooks, and custody audits, not by grand pronouncements. As he puts it, “I don’t see an immediate case for Bitcoin to be used as money in Chile.” The key will be banks. If banks begin offering crypto services, pension fund integration can follow, and even a small allocation of capital could significantly impact the market.

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