Felipe Larraín, Minister of Finance of Chile, announced that work is underway on a bill that will regulate fintech and cryptocurrency companies in the country, which he expects to send to Congress this year. This was announced by the official from the United States while inaugurating the event ChileDay New York 2019. The event aims to turn Chile into a regional financial center.
The bill was expected to be ready by the first half of 2020, but apparently, it will be ahead of schedule. According to Larraín, the inter-institutional working group that develops the project will send it to the National Congress of Chile this same year for discussion, as reported by the local newspaper Diario Financiero:
"The Fintech bill that our government will send will safeguard the security and interests of consumers, while at the same time boosting innovation." This constitutes a cornerstone of our financial inclusion agenda so that our middle class and most vulnerable sectors can access to secure and quality financial services."
The announcement places Chile among the group of countries that are beginning to see the importance of establishing a regulatory framework for this type of technology, which is constantly advancing at a high speed. That is why among the key aspects of this project is flexibility so that the law is not obsolete in a short time.
Larraín also said that in the southern country the exchange of crypto actives has been increasing, an activity that at present is not subject to regulation of any kind.
To this end, from Hacienda, Larraín has warned the public about the risk involved in this type of transaction: "A regulation to these platforms would mitigate some of these risks, such as money laundering and terrorist financing, and increase legal certainty with that they operate. We want to adequately protect the risks associated with this activity," he explained, adding:
"Taking into account the different forms taken by the business models of these platforms and also the fact that different platforms can provide different services, the regulation will apply requirements proportionally, regulating according to the type of service provided and the risks that this implies for the users and for the financial market".
Behind in Fintech
According to FinteChile, the six countries that concentrate on fintech in Latin America are Brazil (33%), Mexico (23%), Colombia (13%), Argentina (10%), Chile (7%), and Peru (5%). Of these, only Mexico already has an established regulation for cryptocurrency platforms, crowdfunding and payment operations.
The rest of the countries are in the process of regulation or have only regulated certain aspects. "From the list, Chile is the most backward country in terms of regulation," says Ángel Sierra, Executive Director of FinteChile.
It was only in February of this year that the Commission for the Financial Market (CMF) released the whitepaper "General Guidelines for the Regulation of Crowdfunding in Related Services", a step that the neighboring countries that concentrate on Fintech have already one or more years ago
For Sierra, the backwardness of Chile in the subject is not necessarily something to lament. In this regard, it considers that if the country quickly capitalizes on the regulatory and implementation weaknesses that existed in the other countries, it has the opportunity to become a reference for the sector in the region. However, he adds that it is imperative to establish a regulatory framework in the matter soon, since, in his words," talking about a financial ecosystem of the 21st century without fintech is difficult".