Why was the $22.96 billion signal ignored: Under conservative governance, Chile's adoption of cryptocurrency will not be as radical as El Salvador's.

The political shift to the right in Chile has become a fait accompli. In the runoff of the December 14 presidential election, conservative candidate José Antonio Kast defeated his left-wing opponent, winning approximately 58% of the vote. This is the most significant rightward turn since Chile returned to democracy. The market’s initial reaction was strong—peso appreciation, stock market gains, and investor expectations of reforms to relax labor laws, reduce corporate taxes, and combat crime.

Some crypto supporters are beginning to wonder: will Chile follow the footsteps of Salvador President Bukele and declare Bitcoin as legal tender?

Short answer: No. Long answer: More interesting, and relevant to global markets.

Looks similar, but mechanisms are completely different

On the surface, Chile and El Salvador are both experiencing a rightward political shift. But their paths to crypto adoption are fundamentally different.

In 2021, Salvadoran President Bukele announced Bitcoin as legal tender from the top down—this was a highly political decision that continues to be widely discussed. Chile’s approach is expected to be bottom-up, technocrat-driven—pushed by legal and regulatory frameworks rather than political declarations.

Three factors define Chile’s uniqueness:

First, the cautious stance of the central bank. Chile’s central bank (BCCh) has taken a different approach from crypto “performances” in recent years. It published a thoughtful analysis on CBDCs and has advanced the “Open Financial System” under the Financial Technology Law (Law 21,521) alongside the Financial Market Commission (CMF). This cautious attitude indicates that a sudden declaration of cryptocurrencies as legal tender is unlikely.

Second, the dominance of the pension system. By the end of 2024, Chile’s pension fund assets will reach $186.4 billion. By mid-2025, this figure exceeds $207 billion. As of October, it has already reached about $229.6 billion. These assets will only flow if all regulatory, risk, custody, and valuation requirements are met. This is a system of adopting new asset classes through regulated tools, not via presidential tweets.

Third, the tax and compliance framework is in place. Chile’s tax rules already treat cryptocurrencies as taxable assets. This further reinforces that adoption will occur through formal intermediaries (brokers, funds, banks), not through mandatory cash register use.

Infrastructure first: ETFs, bank custody, then pensions

So what will appear first in practice?

According to Mauricio Di Bartolomeo, founder and Chief Security Officer of Ledn, Chile’s “crypto moment” will not be as dramatic as in El Salvador or Argentina. He notes:

“I believe the Chilean central bank and new government are unlikely to try to make Bitcoin legal tender.”

A more gradual policy approach is more probable, including tax incentives for small transactions and clear permission for banks to offer custody and trading services. The goal is to enable citizens and businesses to store BTC locally without legal uncertainty.

First, local ETF products. Referring to the US market—BlackRock’s Bitcoin ETF (IBIT) launched in January 2024 and quickly became a tool for traditional institutions to gain Bitcoin exposure. Chile doesn’t need to start from scratch; it just needs to adapt local tools and distribution channels.

Second, banking infrastructure. If the central bank and CMF establish clear rules for bank custody, daily access will become feasible. This includes integration with brokers, portfolio solutions, collateral lending, and corporate treasury plans, allowing companies to store and hedge assets. Chile is gradually building this framework through the Financial Technology Law (Law 21,521) and the open financial system regulation expected in mid-2024.

Finally, pensions. Di Bartolomeo’s pragmatic view: pension funds are tightly regulated and usually cannot directly purchase international funds or assets not registered in Chile. So “jurisdiction choice” is critical. If international spot ETFs are unavailable, local ETFs or ETNs could serve as bridges.

Even so, scale will be limited—constrained by custody standards, valuation methods, risk categories, and tax regimes. These seemingly dull but crucial details rarely make headlines.

The real significance behind the numbers

$229.6 billion in pension assets, even if a small fraction is allocated to Bitcoin, implies huge potential capital flows. A 25-50 basis point allocation via local tools could bring billions over time. But it also means regulators will demand custody segregation, reliable pricing sources, and stress-tested liquidity before the first moves.

Chile’s stance on stablecoins also aligns with the “regulated infrastructure” argument. Legal analyses this year show how the Financial Technology Law can identify and guide stablecoin use into the formal system. This cautious approach reduces the risk of informal dollarization while maintaining monetary control.

What should investors watch for

Catalysts are straightforward: bank custody guidelines, securities regulator approval for local ETFs/ETNs, and clear compliance pathways.

On the other hand, key risks include: (1) restrictions on domestic BTC trading by the central bank, (2) punitive taxes on BTC investments, and (3) restrictions on dollar-pegged stablecoins. Any of these could push activity offshore or underground, contrary to the decade-long effort to deepen and formalize the market.

Political signals are already emerging. The central bank issued two reports on CBDCs (2022 and 2024), indicating a cautious, well-considered approach rather than a flashy experiment. The CMF’s 2025-26 regulatory plan and the open finance rules starting in 2024 lay the legal groundwork for secure, interoperable data exchange.

What will be the first practical sign? Focus on local Bitcoin ETF or ETN applications and statements from banks expressing willingness to offer custody and basic trading services. Di Bartolomeo emphasizes:

“A strong signal will be banks starting to offer any Bitcoin-related services or products, or political discussions beginning to update banking policies to accommodate this demand.”

Next, pension developments. Any expansion of permitted asset lists or at least clarifications on digital asset valuation and custody standards will open the door for small pilot portfolios—especially if local tools make access operationally simple.

For retail and commercial levels, targeted tax incentives will help experiments proceed without coercion. Similar to the US de minimis exemption—tax-free small payments—Chile could adopt this to allow people to pay and receive in Bitcoin.

Di Bartolomeo also highlights stablecoin policies:

“Also pay attention to policies regarding dollar-pegged stablecoins (like Tether), as they are increasingly used as money in the region.” Over time, this path could lead users toward Bitcoin.

Bottom line: banks are key

Chile’s crypto future will likely be decided not on the podium but in spreadsheets, regulations, and audits. It’s less glamorous than El Salvador’s declaration of legal tender, but this path can scale.

As Di Bartolomeo states:

“I currently do not see a direct basis for using Bitcoin as money in Chile.”

The key factor is bank participation. If banks start offering related services, pensions may follow—bringing change with just a few basis points. Under the conservative government, change will happen through institutions rather than declarations.