Central Bank of Chile representatives do not believe in the possibility of replacing conventional money with cryptocurrency. They stated this in a report submitted at the request of the Chilean Court of Free Competition (TDLC), which is involved in a dispute between cryptocurrency exchanges and banks in the country.
The Central Bank of Chile noted that Bitcoin and other large cryptocurrencies were created as an alternative to fiat funds, but are at an early stage of development and it is not yet clear what the evolution of digital money will bring. However, the Central Bank of the country is still skeptical about the future of this industry.
“At the moment there is no evidence and facts suggesting a possible replacement of fiat money with bitcoin, other cryptocurrency or digital assets. For this, it is necessary to develop a legislative base and regulate such assets” – the report says.
Also, representatives of the Chilean Central Bank noted the high volatility of cryptocurrencies, their limited acceptance among citizens and the slow processing of payments. Another problem is that the use of cryptocurrency in business in the country is “insignificant” compared to fiat funds.
It is noteworthy that the document contains hints on the future regulation of cryptocurrencies in Chile. It is assumed that digital currencies will be equated to intangible assets, and as a result, assigned to the property, and will also be used as a medium of exchange for the purchase of goods and services without any additional restrictions. Recall that the initial regulation of cryptocurrencies was proposed by the head of the Central Bank of Chile in May last year.
Recently, the Chilean service added a special section to the annual tax return, which describes the income from cryptocurrencies operations. Already this year, Chilean citizens will have to report on income derived from cryptocurrencies.