Banks in Chile have begun closing the accounts belonging to cryptocurrency exchanges BUDA and CryptoMKT. In follow-up, these companies asked the Association of Banks and Financial Institutions (ABIF) to provide a clear position on the digital currency industry. BUDA enables Bitcoin trading pairs while CryptoMKT mostly enables trades against Ether.
According to a report in Pulso Chile, the two companies released a public statement in which they accused the banks of closing their accounts. In their joint statement, the two exchanges stated, “The lack of knowledge and regulatory clarity has given rise to the fact that come banks, out of fear, misinformation or perhaps by strategy, are refusing to provide their services to anyone who has any relationship with any digital asset.” The statement continued on to suggest that the banks were acting as de facto regulators and are choosing the side of prohibition.
The exchanges called on ABIF to make its position fully transparent on whether cryptocurrency companies would have access to banking services and accounts, or if these banks were determined to work against cryptocurrency trading in the country. They also called on government authorities and the population at large to come to some sort of consensus.
World governments, including that of Chile, are suggesting that decentralized assets may be linked to money laundering or other criminal activities, much in the same way that cash was linked to these activities on a broader scale in the past. BUDA and CryptoMKT included a section in their statement that said that they “ha(CNE) ve developed safe platforms of the latest technology for the protection of their customers and have opened channels of collaboration with authorities.”
Each of these companies pay taxes in the form of VAT, and are registered with both the Financial Analysis Unit (UAF) and FATF, meeting their standards for the prevention of money laundering and alleged terrorist financing.
Despite banks closing the accounts of BUDA and CryptoMKT, cryptocurrency is alive and well in Chile. In the private sector, Virgin Mobile Chile has begun accepting cryptocurrency as payment. In the public sector, Chile is putting energy regulation on the blockchain, where the Chilean National Energy Commission will use blockchain technology, according to Andrés Romero, the executive secretary of the National Energy Commission in Chile, according to PV Magazine. The technology will be used as an immutable record of national energy sector data, thus improving the overall quality of data related to average market prices, marginal costs, fuel costs and compliance with renewable energy law.
Although government agencies appear to be bullish on the use of blockchain technology, the banks may remain skeptical. BUDA and CryptoMKT have a point. If the banks do not come out with a clear statement regarding their positions, then not only will the cryptocurrency market be in limbo, but customer funds will also be at risk, should banks continue to close exchange service accounts. With transparency, not only will the exchanges be able to make intelligent business decisions on next steps, but customers will also be able to decide how much they wish to put into the system, knowing any risks associated with such investments.