Chile's Bank Crackdown on Crypto Exchanges Highlights Need for Transparency And Dialogue as “Old” Faces “New”
A few weeks ago, Chile's state-owned bank, Banco del Estado de Chile informed informed three cryptocurrency exchange clients - Orionx, CryptoMKT and Buda.com - that their accounts would be closed in 10 days. The move came after Canada's Scotiabank and Brazil's Itaú said they would be closing the accounts of the three exchanges. As a result of the bank's decision to cut them loose, the exchanges - reportedly the only ones in the country to obtain traditional bank accounts - will no longer have access to wider financial services.
The move highlights the growing importance of educating, and working with traditional industries, to create trust frameworks for new technologies that can meet existing laws and requirements, enable growth of nascent markets, and potentially serve to improve people’s lives in countries across the globe.
While volatility and speculation in cryptocurrencies has caused them to come under scrutiny, they do and will continue to play an important role in our economies going forward. The number of global blockchain wallets has grown exponentially in the past seven years, as cryptocurrencies allow individuals in any country to participate in the global economy.
And many of these organizations are growing legitimate businesses, trying to work within both the letter and spirit of the law as it stands today and is developed. For example, Buda.com and CryptoMKT.com are innovative national companies that operate in Argentina,
Colombia, Peru and Brazil. Customers exchange Bitcoin and / or Ether for local money at market prices. They pay VAT, they are registered, they report and comply with the protocols and standards established by the Financial Analysis Unit (UAF) in matters of prevention of money laundering and financing of terrorism. Both have developed platforms of the latest technology for the protection of their clients, have opened collaboration channels with authorities, and have invested resources in educating the market about this technology
But as an industry, we need to expand our role in that education. It falls on the shoulders of every new technology industry to explain the benefits of that technology to those who have not been steeped in it. It requires competitors to collaborate for the common good. In this way we can demonstrate the benefits it can have on societies and countries. This is the best way to allay the fears of regulators who are only trying to protect their constituents from the dangers they see in these technologies. If we fail at that, we will limit the growth of markets and drive the technology underground, where it will be the purview of those who choose to use it for less-than-scrupulous activities.
Sunlight is the best disinfectant. We need to bring all parties to the table. We need to allow all stakeholders to honesty discuss fears, potential abuses, and concerns. In this way we can build trust frameworks and policies that allow citizens of every country to benefit from this technological wave and others to come.
We will be planning an in-region listening and learning tour in the future, and will publish details as soon as we have them. We hope you’ll join us in this discussion, to help further the promise of this technology.