Chilean bank BCI allows crypto exchanges to open checking accounts

The Chilean bank BCI has launched a protocol that allows crypto exchanges to open checking accounts with the financial institution, becoming the first bank in the country to offer this service.

BCI bases its policies on the Financial Action Task Force’s (FATF) recommendations of requirements for exchanges to open accounts, including transactions traceability, compliance fulfillment, anti-money laundering measures and external audits. A BCI spokesperson said the protocol would benefit users by allowing them to “operate in this market within a framework of security and trust.”

Buda, a major crypto exchange in Chile, was the first to open an account with BCI after signing an agreement with the bank and fulfilling its requirements. Buda CEO Guillermo Torrealba expressed his joy about this development.

“We are happy with this agreement and grateful for Banco Bci’s vision,” Torrealba said. “Sooner rather than later, cryptocurrencies will be a fundamental part of banking and we want to help accelerate that moment.”

The news marks a milestone for crypto exchange platforms in the country, which have demanded the right to use traditional banking services for several years. In 2018, Buda and Crypto MKT, another local crypto exchange, sued domestic banks for closing their accounts. They claimed that these banks had used their power to “cripple” competition from alternative finance like cryptocurrency. The court proceeding is still ongoing at the time of writing.

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Crypto in Chile

In 2021, Statista ranked Chile as the 18th country in the world and fourth in Latin America with the highest rate of crypto adoption. Fourteen percent of Chileans reported that they owned or used crypto last year.

Authorities in Chile do not prevent citizens from conducting crypto transactions. However, several parties, including the central bank, expressed concerns regarding crypto, mainly related to its use to conduct illicit activities and a possible disruption in access to finance for traditional banks if digital currencies are used as bank deposits.

Last year, the Central Bank of Chile announced plans to issue a central bank digital currency (CBDC), the digital peso, at the beginning of 2022. It explained that although virtual currency only took a small portion of daily transactions in Chile, once it became widespread, crypto could alter the “functioning of the financial market."

However, the plans have been postponed, with the central bank saying they will publish a new report before the end of the year. It explained that there was not enough data to make the final decision regarding the issuance of Chile’s digital peso. Nevertheless, the bank insisted that CBDC could mitigate the risks of digital transformation and improve the country’s current financial system.

“A CBDC would contribute to achieving a competitive, innovative and integrated payment system that is inclusive, resilient and protects people’s information,” the central bank said.

Like Chile, other countries in Latin America have made attempts to regulate crypto within their respective countries. Last May, the Argentinian central bank stopped two domestic banks from offering crypto services to their clients, citing the necessity to “mitigate the risks crypto poses.” Brazilian Senate also passed a crypto bill last April, which is currently pending approval from Congress.

Nevertheless, banks in other Latin American countries are more open to cryptocurrency. Santander in Brazil, for example, recently established a crypto asset division and announced plans to offer crypto services to its customers.