Radical from the roots, but held back by mathematics: Chile's crypto paradox and the 229 billion that matter

José Antonio Kast’s victory on December 14, 2024, has sparked hope among Bitcoin enthusiasts who imagine Chile as the next “Bukele moment.” The story is enticing: a conservative government with rhetoric of order and deregulation should open the doors to Bitcoin. But there’s a detail that upends this narrative. While attention remains fixed on symbolic moves and political statements, there is a “signal” from $229.6 billion that speaks a completely different language: the mathematics of institutional constraints. Ignoring it means failing to understand how Chile will truly address crypto issues in the coming years.

The System’s Mathematics: Why the Chilean Central Bank Won’t Follow Bukele’s Path

Let’s start with a fact: Chile is not El Salvador. This statement carries more meaning than it seems at first glance. In 2021, Nayib Bukele declared Bitcoin legal tender from the stage, a top-down move that still dominates headlines today. For Chile, any evolution will be radically different.

The Chilean Central Bank (BCCh) in recent years has taken the opposite approach to “crypto theater.” It has soberly analyzed the possibilities of a central bank digital currency (CBDC) and, together with the Financial Market Commission (CMF), has implemented the open finance framework provided by the Fintech Act (Law 21.521). This kind of institutional work does not precede revolutionary declarations; it signals methodical caution.

Unlike governments experimenting on the front page, Chile operates according to precise regulatory mathematics. Regulators do not act on presidential tweets or electoral rhetoric. They act when governance, risk, custody, and valuation structures are defined in detail. It’s a mathematics radically different from political populism: it’s the arithmetic of compliance.

The Real Numbers That Matter: The $229 Billion Pension Fund Factor

This is where mathematics becomes truly radical, albeit in the opposite direction of what Bitcoiners hope. The Chilean pension system (AFP) is the real silent decision-maker. At the end of 2024, Chilean pension funds held $186.4 billion. Throughout 2025, that figure steadily grew: mid-year it reached about $207 billion, and by October, it surpassed $229.6 billion.

Almost $230 billion represents $230 billion that only move when certain constraints are met. It’s not free or private capital. It’s capital bound by rules requiring rigorous governance, segregated custody standards, transparent valuation methodologies, precise risk classifications, and defined tax treatments. A system that absorbs new asset classes only through formal regulated vehicles, never by presidential decree.

To understand the true meaning of “radicality” in Chile, one must accept this truth: any significant exposure of the pension sector to Bitcoin will happen only when the technical and regulatory structures allow and protect every individual investor. This is not theater. It’s financial discipline.

ETFs, Custody, Stablecoins: The (Non-Radical) Technical Roadmap for Adoption

If the pension system demonstrates the impact of regulatory mathematics, infrastructure represents the real pathway. According to Mauricio Di Bartolomeo, co-founder and Chief Strategy Officer of Bitcoin lender Ledn, Chile will not have “radical” legal tender introductions but “incremental normalization through technical channels.”

The first step will likely be the creation of local Bitcoin ETFs and exchange-traded notes (ETNs). The U.S. provides a model: the launch of BlackRock’s iShares Bitcoin Trust (IBIT) in January 2024 transformed BTC into a standard institutional exposure. Chile doesn’t need to reinvent; it needs to translate into local vehicles. From there, the real enabler becomes banking infrastructure. If BCCh and CMF establish clear guidelines for bank custody and facilitation at the banking level, daily access will naturally follow.

Chilean banks could then integrate custody services with brokers, managed wallets, collateralized loans, and treasury programs that allow holding and hedging positions. Chile has already built this foundation through the Fintech Act and the open finance regulations issued mid-2024. These rules enable banks to add services without compromising risk controls—exactly the mathematics regulators require.

Regarding stablecoins, Chile is developing a framework that recognizes them as part of the formal ecosystem, allowing their use through controlled channels. It’s a cautious approach that reduces informal dollarization risks while maintaining the central bank’s monetary control.

Regulatory Catalysts vs. Real Obstacles: Where to Look for True Signals

What factors will accelerate or slow this process? The catalysts are technical, not political:

• Clear guidelines from BCCh on Bitcoin custody by banks
• Approval from securities regulators for local Bitcoin ETFs and ETNs
• Explicit compliance pathways for distribution among brokers and financial institutions
• Clarifications from CMF on tax treatment and valuation standards for digital assets

On the other hand, the radical obstacles that could block everything are equally “mathematical”: restrictions by BCCh on domestic Bitcoin buying/selling, punitive taxation on Bitcoin investments, or limitations on the use of dollar-pegged stablecoins. Each would push activity into offshore instruments or shadow markets, exactly the opposite of the decade-long work Chile has invested in formalizing and deepening its financial markets.

CMF is currently implementing a regulatory plan for 2025–26 that could clarify these points. BCCh continues publishing analyses on CBDCs (latest in December 2024), signaling a central bank that prefers thoughtful architecture over headline-grabbing experiments.

Mathematics Wins Over Rhetoric

While José Antonio Kast asserted legitimate impulses toward deregulation during his campaign, the Chilean system continues channeling change through institutions and compliance. Markets celebrated his victory. Congress remains divided. And the first hundred days of the administration will define not what the government promises but what the regulatory mechanism allows.

For those investing in Chile’s crypto future, concrete signals will come from local ETF requests, banks offering custody, and regulatory circulars expanding the list of permissible assets for pension funds. There will be no radical moves. Only acts of extraordinary mathematical discipline. And it is precisely this discipline that will enable Chile to scale, unlike models based on political impulses that rarely endure over time.

As Di Bartolomeo states: “I don’t see an immediate case for Bitcoin as money in Chile.” The shift will come from banks, if it comes. Pensions can follow—and it won’t take many basis points to make a billion-dollar difference. But it will happen according to Chilean mathematics, not radical rhetoric.