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Crypto Cheer in Chile as Exchanges Win Legal Battle

Tim Alper
Last updated: | 2 min read

Cryptocurrency and blockchain technology enthusiasts in Chile are enjoying an optimistic start to the year – with a court ruling in favor of the country’s exchanges in an ongoing legal dispute, and the treasury testing public payments on a new blockchain-powered platform.

Source: iStock/Martin Barraud

The court ruling comes as the latest development in a bitter and long-running legal dispute between leading Chilean banks and domestic exchanges that has raged since early last year. Banks, such as BancoEstado and Itau, moved last year to freeze the accounts of exchanges such as Orionx and Buda. However, the exchanges complained that this represented a restriction of trade.

The banks appeared to have secured a comprehensive victory in the case last month, when the Supreme Court – the highest legal body in the land – upheld the banks’ decision to freeze crypto accounts.

However, per media outlet Diario Financio, Chile’s Court of Defense of Free Competition, has ordered banks to continue doing business with exchanges for the time being, stating that the Supreme Court’s ruling “did not constitute a new precedent,” and marked an “abuse of power.” Per a Buda blog post, the ruling means that “banks must reopen exchange accounts and keep them open for the duration of the legal process, to ensure […] no irreparable economic damage is done to the platforms.”

The matter is far from closed, though. A further hearing has been set for February – with the country’s finance and economy ministers set to testify.

Meanwhile, the country’s treasury has begun a pilot for a blockchain-powered platform that will allow suppliers and banks to conduct transactions via a decentralized ledger. The treasury states that using centralized systems has led to “minor discrepancies” in transactions – a wrinkle that the blockchain platform will help iron out.

Per an official release, the new platform will ensure a “lower cost for transactions,” although the treasury has not indicated what sort of technology it has based its platform on.

The government is thought to be particularly keen on exploring a range of possible blockchain technology adoption initiatives, with some observers believing that other ministries may be working behind the scenes on projects of their own.

The Chilean parliament is also set to debate a blockchain-themed bill proposed by a group of MPs in October last year.
Weekly LocalBitcoins, a peer-to-peer bitcoin marketplace, volume (in bitcoin) in Chile: