Bitcoin enthusiasts anticipating a “Bukele moment” in Chile are overlooking a significant $229 billion indicator that holds greater importance.

Chile has undergone a significant transformation. In a pivotal runoff on December 14, José Antonio Kast, a conservative ex-congressman and head of the Republican Party, secured the presidency with approximately 58% of the votes against leftist candidate Jeannette Jara.

This represents Chile’s most pronounced shift to the right since the restoration of democracy. Markets interpreted this as a signal for deregulation: the peso and stock indices strengthened amid expectations of relaxed labor regulations, reduced corporate taxes, and a focus on law and order to address crime and migration issues that were central to the campaign.

Kast’s journey to La Moneda was fueled by public concerns regarding security and stagnant economic growth. His platform combined a commitment to “restore order” with intentions to stimulate private investment, particularly in the copper sector.

He also softened some aspects of previous campaigns to attract center-right voters in a divided Congress. The immediate post-election message emphasized unity, but the political landscape suggests a gradual approach.

Nonetheless, Kast campaigned in the context of regional leaders who have established their reputations on security and deregulation. He has openly referenced El Salvador’s Nayib Bukele as a model for addressing crime, and his comparisons to “tough on crime” governance resonated with Chileans concerned about organized crime and migration challenges.

Argentina’s libertarian president Javier Milei quickly met with Kast in Buenos Aires shortly after the election, highlighting ideological similarities across the Andes. However, both leaders face distinct challenges domestically.

This political context naturally raises a question regarding cryptocurrency: does a rightward shift position Chile on a Bukele-like trajectory for Bitcoin?

The brief answer from Chile’s institutions and market framework is no. The more detailed response is intriguing and holds global significance.

Chile is not El Salvador—and that’s the key

It’s easy to draw parallels with El Salvador. In 2021, President Nayib Bukele declared Bitcoin as legal tender, a groundbreaking political move that continues to generate discussion today.

Regardless of opinions on its outcomes, the decision was top-down and symbolic. Chile’s approach is likely to be bottom-up and technocratic, influenced more by legal and technical limitations than by political motivations.

Three key factors distinguish Chile. First, the central bank (BCCh) has spent recent years doing the opposite of engaging in crypto theatrics.

It has released serious analyses on central bank digital currencies (CBDCs) and enacted the Fintech Act’s open-finance framework in collaboration with the Financial Market Commission (CMF). Such engagement indicates caution rather than abrupt moves like adopting crypto as legal tender.

Second, the pension system dominates the local market. By the end of 2024, Chile’s pension funds are projected to hold $186.4 billion.

By mid-2025, that amount is expected to exceed $207 billion. By October, it had reached around $229.6 billion.

This represents $229.6 billion in assets that only change hands when governance, risk, custody, and valuation criteria are met. This system accommodates new asset classes through regulated frameworks, not through presidential announcements.

Third, Chilean tax and compliance regulations already classify crypto as an income-taxable asset. This reinforces the notion that adoption will occur through formal intermediaries (brokers, funds, banks) rather than through mandates at points of sale.

This is the broader context. It’s also why Mauricio Di Bartolomeo, co-founder and CSO of Bitcoin lender Ledn, believes Chile’s “crypto moment” will differ significantly from those in El Salvador or Argentina.

“I believe it is unlikely that the Chilean Central Bank and the new government will attempt to make Bitcoin legal tender in the country,” he states.

In his perspective, a more suitable approach would involve incremental policies that normalize usage. This could encompass minimal tax relief for small transactions and clear permissions for banks to provide custody and trading services.

The aim is to enable citizens and businesses to hold BTC locally without legal uncertainties.

Follow the rails: ETFs, bank custody, and (eventually) pensions

What developments can we expect on the ground?

“Local ETF products that allow regulated entities to gain exposure,” Di Bartolomeo suggests, referencing the surge of spot Bitcoin ETFs internationally as a model.

In the US, BlackRock’s iShares Bitcoin Trust (IBIT) began trading in January 2024, quickly transforming the asset into a viable option for traditional institutions. Chile doesn’t need to reinvent the wheel; it needs to adapt it into local frameworks and distribution channels.

From that point, the key factor is bank infrastructure. If the central bank and CMF establish a clear set of permissions for bank-level custody and facilitation, everyday access will follow.

This includes brokerage integration, discretionary portfolio allocations, collateralized lending, and corporate treasury programs capable of holding and hedging.

Chile has been systematic in developing these frameworks through the Fintech Act (Law 21,521) and the Open Finance System regulations introduced in mid-2024. This groundwork allows banks to introduce new services without compromising risk controls.

But what about the significant issue of pensions (AFPs)? Di Bartolomeo’s perspective is pragmatic: pensions are governed by strict regulations, often prohibited from directly purchasing international funds or limited in how they can hold assets not based in Chile.

This is why “jurisdictional opportunities” are crucial. If international spot ETF units are unavailable, he suggests that domestic ETFs or ETNs could serve as the bridge AFPs require.

Even then, the initial scale would be modest, constrained by custody standards, valuation methods, risk categories, and tax implications. These are the practical, critical details that rarely make headlines.

The figures underscore the importance. A pension system that concluded 2024 at $186.4 billion and continued to grow through 2025 doesn’t need to shift significantly to have an impact.

A 25–50 basis points allocation via local wrappers could represent billions of dollars in potential inflows over time. However, it also implies that regulators will demand custody segregation, price-source integrity, and stress-testable liquidity before any movement occurs.

Chile’s position on stablecoins aligns with this “regulated rails” concept. Legal analyses this year have emphasized how the Fintech Law framework can recognize and integrate stablecoin usage into the formal system.

This cautious approach mitigates informal dollarization risks while maintaining monetary control. Anticipate near-term clarity in this area to facilitate retail-grade on-ramps.

Catalysts, deal-killers, and the scoreboard to watch

If the baseline scenario is that infrastructure comes first, what could accelerate or hinder it? Di Bartolomeo identifies key institutional deal-killers: (1) any central bank restrictions on domestic BTC trading, (2) punitive tax policies for BTC investments, and (3) limitations on USD-pegged stablecoin usage.

Each of these would drive activity offshore or into the shadows, countering Chile’s decade-long effort to deepen and formalize its markets.

Conversely, the catalysts are straightforward: bank custody guidelines, regulatory approvals for local ETFs/ETNs, and clear compliance pathways for distribution.

On the policy front, there is already movement. The BCCh has published two CBDC reports (2022 and 2024), indicating a central bank that favors careful architecture over attention-grabbing experiments.

The CMF is implementing a regulatory plan for 2025–26 and has been introducing Open Finance rules since 2024. This legal framework enables secure, interoperable data-sharing, and consequently, the development of new products.

None of this suggests “legal tender.”

As for politics? Kast’s victory, celebrated by regional conservatives and followed by an early meeting with Argentina’s libertarian president Javier Milei, sets a deregulatory tone.

However, the Chilean system still channels change through institutions. Markets responded positively to the outcome, Congress remains divided, and the initial hundred days will be characterized by what the government can navigate through the regulatory process, rather than sweeping monetary reforms.

For those invested in the future of crypto in Chile, Di Bartolomeo’s insights are refreshingly actionable. The first indications will likely be applications for local Bitcoin ETFs or ETNs, followed closely by banks indicating intentions regarding custody and basic trading capabilities.

He emphasizes that this is not about spectacle, but about enabling practical on-ramps:

“A strong signal for broader adoption would be banks offering any Bitcoin-related services or products, or policy discussions around updating banking policies to allow for this.”

He believes this transition could normalize the holding and transacting of Bitcoin locally without ambiguity. From that point, focus will shift to pensions.

Any circular that expands eligible asset categories, or even just clarifies valuation and safekeeping standards for digital assets, would pave the way for small, testable allocations within Chile’s largest capital pools, especially if domestic wrappers simplify access operationally.

On the retail and commerce front, narrowly defined tax relief could encourage experimentation without imposing it. Di Bartolomeo points to de minimis-style exemptions for small transactions already discussed in the US as a model that Chile could adopt to facilitate the use of Bitcoin for payments.

He also highlights stablecoins as a relevant policy tool:

“I would also look at policies surrounding the use of USD-pegged stablecoins like Tether, as these are increasingly being utilized as currency in the region,” a strategy he suggests could still guide users toward Bitcoin over time.

Chile’s cryptocurrency future is likely to be shaped not by grand announcements, but by term sheets, regulatory frameworks, and custody audits. While this may not be as sensational as El Salvador’s legal-tender initiative, it represents a scalable path.

As Di Bartolomeo summarizes:

“I don’t see an immediate case for Bitcoin to be used as money in Chile.”

The key indicator will be the actions of banks. If that occurs, pensions can follow—and it won’t require many basis points to create a significant impact.

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