Category Archives: Chile bitcoin news

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Chile Central Bank: Crypto Needs Legal Framework to Substitute Fiat

Chile

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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Chilean Government Moves to Tax the Cryptocurrency Sector

Chilean

The Chilean government has decided to expand the tax net by including the burgeoning cryptocurrency market in the country. The Internal Revenue Service (Servicio de Impuestos Internos, SII) has recently amended the taxpayers’ Annual Income Tax Returns form by adding a section for crypto assets.

Last year, the Chilean government decided to omit cryptocurrencies from Value-Added Tax (VAT) and classified them as “intangible assets.” But it seems Chileans will have to eventually pay taxes on crypto-related earnings since it adds up to their total income. To keep track of that, the Chilean government has included a new section in the forms, making the taxpayers declare “their own income and/or third-party income from cryptocurrencies companies that declare their effective income.”

This development accompanies an official notification by the director of the SII, Fernando Barraza, who has made it mandatory for all crypto traders to register their operations through “tax-exempt invoices”. The move also aims to monitor the exponentially increasing crypto activity in the country and “offers legitimacy to cryptocurrencies,” where people are increasingly using them as “valid currencies to trade products and services.”

In an interview, a member of an NGO Bitcoin Chile and tax attorney Patrício Bravo revealed that the Chilean cryptocurrency community has been eagerly waiting for SII’s input. He added,

“[The SII] has arranged taxation in the broadest possible way, this is apparently due to two objectives: on one hand expand the tax structure as much as possible to cover all types of crypto assets and, on the other hand, due to the current lack in Chilean legislation of figures specifically designed for this type of instruments, which makes it difficult to generate more specific items.”

The crypto traders will be looking at the changes rather nervously since they already have had their fair share of bureaucratic problems that included blocking of their current accounts by all major banks. That was followed by long and ugly legal battles which resulted in the Third Chamber of the Chilean Supreme Court rejecting their appeals and siding with the banks. But the investors will be hoping for a bit of relief and better news from these latest developments.

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