Chile has made a powerful turnaround. In the decisive run-off election on December 14, conservative former congressman and Republican leader Jose Antonio Casto won the presidential election with about 58% of the vote, beating leftist Janet Jara.
This marks the sharpest shift to the right since Chile returned to democracy. The market took this as a signal for deregulation. The peso and stocks rose on hopes for loosening labor rules, lower corporate taxes and promoting law and order against the crime and immigration pressures that dominated the campaign.
Mr. Casto’s path to La Moneda ran straight through public fears about security and stagnant growth. His platform combined a pledge to “restore order” with a pledge to revive private investment, particularly in copper.
He also toned down some of his previous campaign efforts to curry favor with centre-right voters in a divided parliament. While the message immediately following the election was one of unity, the political calculations going forward suggest gradualism.
Still, Mr. Casto campaigned in the regional shadow of leaders who built their brands on rhetoric of security and deregulation. He openly cited El Salvador’s Nayib Boucle as a model for crime, and the comparison to his “tough on crime” governance resonated with Chileans frustrated by the impact of organized crime and immigration.
Argentina’s liberal President Javier Millay immediately met with Mr. Casto in Buenos Aires a few days after the vote, a snapshot of ideological unity across the Andes. Still, each household faces different constraints.
This political background naturally raises questions about virtual currencies. Will a shift to the right put Chile on the path of Bitcoin’s Boucle?
The simple answer given Chile’s institutions and market structure is no. Longer answers are more interesting and more globally relevant.
Chile is not El Salvador, and that’s the point.
I would like to compare it to El Salvador. In 2021, President Nayib Bukele introduced Bitcoin as legal tender. It was the first political statement of its kind that still makes headlines.
No matter what you think of the outcome, the move was top-down and symbolic. Chile’s path is likely to be bottom-up and technocratic, driven more by legal and technological constraints than by politics.
Three anchors make Chili different. First, the central bank (BCCh) has been doing the opposite of the crypto theater in recent years.
It published a sober CBDC analysis and introduced the open finance regime of the FinTech Act in parallel with the Financial Markets Commission (CMF). This kind of effort is not a sudden ploy to make cryptocurrencies legal tender, but a sign of caution.
Second, pension plans tower over the regional market. By the end of 2024, Chile’s pension funds held $186.4 billion.
By mid-2025, that number had exceeded $207 billion. By October, it had reached about $229.6 billion.
This equates to $229.6 billion in assets that will only move if you check the boxes for governance, risk, custody, and valuation. This is a system that absorbs new asset classes through regulated wrappers, not presidential tweets.
Third, Chile’s tax and compliance regulations already treat virtual currencies like income taxable assets. This reinforces the idea that adoption will take place through formal intermediaries (brokers, funds, banks) rather than being mandated at checkout counters.
That’s the macro background. That’s why Mauricio Di Bartolomeo, co-founder and CSO of Bitcoin lender Redon, believes Chile’s “crypto moment” is not like El Salvador or Argentina.
“I think it is unlikely that Chile’s central bank and the new government will try to make Bitcoin legal tender in the country,” he says.
More appropriate, in his view, is an incremental policy that normalizes usage. This could include minimal tax relief for small-value transactions and clear permissions for banks to provide custody and buying and selling services.
The goal is to allow citizens and businesses to hold BTC locally without legal ambiguity.
Follow the rails: ETFs, bank custody, and (eventually) pensions
So what is the first thing that appears on earth?
“It’s a domestic ETF product that gives exposure to regulated companies,” Di Bartolomeo said, pointing to the overseas wave of spot Bitcoin ETFs as a template.
In the US, BlackRock’s iShares Bitcoin Trust (IBIT) began trading in January 2024, quickly turning the asset into portfolio-grade exposure for traditional financial institutions. Chile doesn’t need to reinvent the wheel. I need to convert it to a local wrapper and distribution.
From there, the gate element is the bank rail. Routine access becomes possible once central banks and CMFs establish a clear set of permissions for bank-level custody and facilitation.
This includes brokerage consolidation, discretionary portfolio sleeves, secured loans, and corporate finance programs that can be held and hedged.
Chile has systematically worked towards building these frameworks through the FinTech Law (Law 21,521) and the Open Finance System Regulation, published in mid-2024. This foundation allows banks to add new services without breaking risk controls.
But what about the elephant in the room, pensions (AFP)? Di Bartolomeo’s view is realistic. Pensions are rule-bound instruments, often prohibiting direct purchases of international funds or restricting how assets not domiciled in Chile can be held.
That’s why “opportunity for trial” is so important. He said domestic ETFs and ETNs could be the bridge AFP needs if international spot ETF units become off-limits.
Even then, sizing is limited by storage standards, valuation methods, risk buckets, and tax treatment, and starts small. These are mundane, make-or-break details that rarely make headlines.
The numbers indicate the stake. The pension system, which ended in 2024 at $186.4 billion and continued to grow through 2025, doesn’t need to make much of a move.
A 25-50 bps sleeve through a local wrapper represents billions of dollars in potential flows over the long term. But it also means regulators will require storage segregation, integrity of price sources, and stress-testable liquidity before the first basis points move.
Chile’s stance on stablecoins also fits into this “regulated rail” theory. This year’s legal analysis highlights how fintech legal frameworks can recognize the use of stablecoins and incorporate them into formal systems.
This is a prudent approach that reduces the risk of informal dollarization while maintaining monetary control. We expect to see an acceleration of retail-grade adoption in the near term.
Catalysts, deal killers, and remarkable scoreboards
If the base case is rail first, what will speed it up or stop it? Di Bartolomeo’s biggest trade killers are institutional: (1) central bank restrictions on domestic BTC buying and selling, (2) punitive taxation of BTC investments, and (3) restrictions on the use of stablecoins pegged to the US dollar.
Each will push activities overseas and into the shadows, a reversal of Chile’s decade-long project to deepen and formalize the market.
On the other hand, the trigger is simple. Guidance on bank custody, green light for local ETFs/ETNs from securities regulators, and clear compliance channels for distribution.
There is already movement on the policy scoreboard. BCCh has released two CBDC reports (2022 and 2024), evidence that central banks favor intentional architecture over headline-grabbing experimentation.
The CMF is implementing its regulatory plan for 2025-26 and is rolling out open finance rules from 2024. It is a legal framework that enables secure and interoperable data sharing, and thus new products.
None of them can be said to be “legal tender”.
And what about politics? Casto’s victory, which was welcomed by conservatives in the region and followed an initial bilateral agreement with Argentina’s liberal President Javier Millei, created an atmosphere of deregulation.
However, Chile’s institutions still drive change through institutions. Markets rallied after the results, but Congress remains divided, and the first 100 days will be determined by how far the government can push for more rule-making rather than full-scale financial experimentation.
For those investing in the future of Chile’s cryptocurrencies, Di Bartolomeo’s advice is refreshingly validating. The first hint will likely be an application for a local Bitcoin ETF or ETN, followed in rapid succession by banks indicating their intent for custody and basic buying and selling functions.
He insists that this is not theatrical, but to allow for a normal entrance.
“Policy discussions about banks offering Bitcoin-related services and products, or updates to banking policies that allow this, will be a strong signal to encourage broader adoption.”
He believes this change could normalize local ownership and trading without ambiguity. From there, the focus shifts to pensions.
Circulars that simply expand the menu of eligible assets or clarify the valuation and custody standards for digital assets could open the door to small-scale, testable exposure within Chile’s largest pool of capital, especially if domestic wrappers make access operationally easier.
In retail and commerce, narrow tax cuts would help experiment without forcing them. Di Bartolomeo cited a de minimis-style exemption for small payments, already being discussed in the United States, as a model Chile could adopt to allow people to use and receive Bitcoin for payments.
He also flags stablecoins as a viable policy tool.
“We will also consider policies around the use of stablecoins pegged to the US dollar, such as Tether, as these are increasingly being used as currencies in the region,” he said, adding that over time users could become more concentrated in Bitcoin.
The future of cryptocurrencies in Chile will likely be decided not by podiums but by term sheets, rulebooks, and custody audits. This isn’t as talked about as El Salvador’s introduction of a fiat currency, but it’s a potential path to scale.
Di Bartolomeo said:
“I think it is unlikely that Bitcoin will be used as a currency in Chile immediately.”
The bank will tell you. If that happens, pension payments could be delayed and it wouldn’t take as many basis points to change policy.