RESEARCH: Chile Cryptocurrency Regulation and Fintech Law Implementation

Primary Legal Framework

Fintech Law (Law No. 21.521) is the primary regulatory framework for crypto and digital assets, effective February 2023 Official Gazette Publication
The law establishes that cryptoassets are classified as "intangible assets" within Chile's financial regulatory framework, creating a distinct legal category Fintech Law Article 1
Chile has established a comprehensive multi-agency regulatory framework for crypto, governed by the CMF, Central Bank, and UIF in coordination CMF Description

Direct requirement: The Fintech Law mandates that the CMF will establish minimum capital requirements for regulated entities, including VASPs, through secondary regulation Fintech Law Article 10
Direct requirement: The law requires initial paid-up capital specifically for payment service providers and other regulated entities Fintech Law Article 10 transitory
Reasonable interpretation: The concept of "patrimonio" (equity/net worth) required by Article 10, combined with CMF's responsibility to ensure financial stability, strongly implies ongoing solvency requirements will be established, though "operational capital" is not explicitly mandated in the law text CMF Regulatory Agenda
Requirements will be calibrated based on type of activity, volume of operations, risks involved, and nature of assets Fintech Law Article 10

Direct requirement: All VASPs are designated as "reporting entities" by the Unidad de Análisis Financiero (UIF), Chile's Financial Intelligence Unit, and must register with the UIF UIF Law Article 3
Direct requirement: VASPs must implement comprehensive AML/KYC programs including Customer Due Diligence (CDD) for identifying and verifying customer identity UIF Circular 0057
Direct requirement: Enhanced Due Diligence (EDD) is required for high-risk customers and transactions UIF Circular 0057
Direct requirement: Transaction monitoring for suspicious activities is mandatory UIF Law Article 3
Direct requirement: Obligation to report suspicious transactions (STRs) to the UIF within established timelines UIF Law Article 3
Direct requirement: Record keeping for customer identification and transactions for a minimum of 5 years UIF Law Article 3
Direct requirement: Appointment of a designated AML officer responsible for compliance UIF Circular 0057
Direct requirement: Implementing internal controls and providing regular employee training on AML UIF Circular 0057

Reasonable requirement: VASPs seeking CMF authorization will likely be required to establish a local legal entity in Chile, as the Fintech Law regulates entities "domiciled in Chile" Fintech Law Article 2
Reasonable requirement: This typically entails having a registered office, local management, and local operational capabilities, as required by general Chilean company law Chilean Companies Law
Reasonable requirement: Key personnel (directors, senior management, compliance officers) must be identifiable and subject to "fit and proper" assessments, though residency requirements are not explicitly stated in the Fintech Law CMF Fit and Proper Guidelines

Reasonable requirement: Robust systems for security, data protection, transaction processing, and business continuity are implied by the CMF's authority to issue operational regulations CMF General Rule 384
Reasonable requirement: Cybersecurity measures to protect against cyberattacks and data breaches are governed by general cybersecurity regulations applicable to financial entities CMF Cybersecurity Standards
Reasonable requirement: Comprehensive risk management policies for operational, market, liquidity, and reputational risks are standard requirements for regulated financial entities CMF Risk Management Guidelines
Direct requirement: Clear ownership structures and effective corporate governance are required by the Fintech Law Fintech Law Article 9

Direct requirement: Consumer protection measures, including clear terms of service and transparent communication, are mandated Fintech Law Article 15
Reasonable requirement: Regular external and internal audits are standard for regulated financial entities under Chilean regulation CMF Audit Standards

Direct requirement: Develop a comprehensive business plan as part of the application CMF Application Guidelines
Direct requirement: Design and document AML/KYC policies, risk management framework, cybersecurity protocols, and internal controls CMF Application Guidelines
Direct requirement: Identify key personnel and prepare "fit and proper" documentation CMF Application Guidelines
Direct requirement: Ensure adequate capital is available or committed Fintech Law Article 10
Recommended practice: Pre-application informal consultations with CMF to discuss business model and clarify regulatory uncertainties CMF Guidance

Direct requirement: Complete official application forms provided by the CMF CMF Application Form
Direct requirement: Submit all required documentation including business plan, legal entity documents, ownership structure, capital proof, AML/KYC manual, IT audit reports, risk management policies, corporate governance manual, and fit and proper documentation CMF Documentation Requirements
Direct process: CMF reviews the application for completeness and compliance with Fintech Law and secondary regulations CMF Review Process
Direct process: CMF may request additional information, clarifications, or amendments CMF Review Process
Reasonable process: This stage may involve interviews with key personnel and potentially on-site inspections CMF Review Process
Direct outcome: If satisfied, CMF issues the authorization and formally registers the entity CMF Registry

Direct requirement: Continuous adherence to all regulatory requirements Fintech Law Article 12
Direct requirement: Regular reporting to CMF and UIF (financial reports, compliance reports, suspicious transaction reports) CMF Reporting Obligations
Direct requirement: Undergo periodic audits and inspections by the CMF CMF Supervision Framework

Direct requirement: Establish a Chilean legal entity to operate as a VASP Fintech Law Article 2
Direct requirement: Pay applicable application fees as determined by CMF CMF Fee Schedule

Direct authority: The Central Bank of Chile is empowered to issue prudential regulations for cryptoassets that meet minimum standards in security, reliability, acceptability, use, and massiveness Central Bank Organic Law
Confirmed status: The Central Bank of Chile has studied a potential CBDC but has not issued one as of October 2024. The bank launched a cooperation agreement for CBDC research in 2022 but no operational CBDC exists Banco Central de Chile CBDC Announcement