Chile's Path to Bitcoin Adoption: Why the Bukele Model Misses the Real Story Behind $229.6 Billion in Pension Assets

When José Antonio Kast’s conservative party swept to power in Chile’s December runoff with 58% of the vote, crypto observers immediately looked for parallels to Nayib Bukele’s El Salvador. The new administration’s deregulatory platform and security-focused messaging seemed to fit the mold. Yet focusing on headline-grabbing policy moves like legal tender designations misses what’s actually driving crypto adoption in Chile—and that’s precisely the point.

The Institutional Reality: Why Top-Down Crypto Theater Won’t Work in Chile

The analytical trap is easy to fall into. Bukele made Bitcoin legal tender via decree. Could Kast do the same? Probably not, and more importantly, he likely won’t need to. The structural differences between El Salvador and Chile are stark.

The Chilean Central Bank (BCCh) has spent the past several years deliberately avoiding the kind of crypto theater that dominated headlines elsewhere. Instead of grandstanding, BCCh published rigorous analyses of a potential digital currency and worked alongside the Financial Market Commission (CMF) to build out the Fintech Act framework and Open Finance System regulations launched in mid-2024. This isn’t the behavior of an institution waiting for a presidential signal to reverse course.

The real constraint isn’t politics—it’s the pension system. As of October 2025, Chilean pension funds (AFPs) held approximately $229.6 billion in assets, up from $186.4 billion at the end of 2024 and $207 billion at mid-year. That’s not pocket change. More crucially, it’s capital that moves only when governance structures, custody standards, risk protocols, and valuation methodologies are in place. A $229.6 billion pool of retirement savings doesn’t reallocate based on rhetoric; it responds to certified compliance pathways.

Existing Chilean tax code already classifies crypto as income-generating assets subject to standard treatment. This framework is unlikely to shift dramatically under the new administration. Instead, adoption will flow through regulated intermediaries—brokers, investment funds, and custodial banks—rather than via citizen-level mandates or payment mandates at the point of sale.

The Actual Catalyst: Building the Rails First

What happens on the ground in the near term? The sequence matters more than any single policy announcement.

Stage One: Local Investment Products

The template already exists. When BlackRock’s iShares Bitcoin Trust (IBIT) launched in the US in January 2024, it transformed how institutional capital accessed the asset. Chile faces no need to innovate from scratch. Instead, regulators need to approve locally-domiciled ETF and ETN structures, giving regulated entities a portfolio-grade wrapper for Bitcoin exposure. This removes legal ambiguity while keeping activity within the formal financial system.

Stage Two: Bank Custody and Distribution Rails

The next bottleneck is banking infrastructure. Once the CMF and BCCh establish clear permission structures for bank-level custody, settlement, and facilitation, retail access cascades quickly. This includes brokerage integrations, discretionary portfolio allocations, collateralized lending facilities, and corporate treasury products. The Fintech Act and Open Finance regulations already provide the foundational architecture for these services, but banks need explicit green lights.

Stage Three: Pension System Entry Points

The pension question is where $229.6 billion meets regulatory caution. AFPs operate under strict rules that typically prohibit or severely limit international direct equity purchases and restrict holdings of non-Chile-domiciled assets. However, this constraint also presents an opportunity: if international spot ETFs remain off-limits, domestic ETFs or ETNs become the bridge asset class. Initial allocations would be minimal—perhaps 25 to 50 basis points—and subject to stringent custody segregation, price-feed integrity, valuation protocols, and stress-testable liquidity requirements. But even small basis points across $229.6 billion compounds meaningfully over time. Regulators will demand these details before a single dollar moves.

The Policy Toolkit: What Accelerates Adoption and What Kills It

Market observers should monitor specific policy signals rather than wait for dramatic pronouncements.

Deal-breakers that would push activity underground:

• Central bank prohibitions on domestic Bitcoin trading or holdings
• Punitive tax treatment of Bitcoin investments that exceeds current standards
• Restrictions on USD-pegged stablecoins like Tether

Any of these would redirect activity offshore or into informal channels, directly contradicting Chile’s two-decade project to deepen and professionalize its financial infrastructure.

Catalysts that would accelerate the timeline:

• Clear custodial guidance from the BCCh permitting banks to hold Bitcoin on behalf of clients
• CMF approval for local Bitcoin-focused ETF and ETN filings
• Regulatory clarification on compliance pathways for retail distribution channels

The initial indicators to watch are concrete: Are local firms filing for Bitcoin ETF approvals? Are major banks announcing custody offerings and basic buy-sell services? Are policymakers discussing updates to asset eligibility rules for pension funds?

What the Current Regulatory Momentum Suggests

The BCCh has released CBDC analysis reports in both 2022 and 2024—consistent signals of deliberative institutional thinking rather than reactive experimentation. The CMF is executing a multi-year regulatory roadmap for 2025-26 and has been progressively implementing Open Finance rules since 2024. This infrastructure enables the secure data-sharing, interoperability, and product innovation that makes regulated Bitcoin adoption possible.

Kast’s victory did produce a market rally on deregulatory expectations, but Chilean institutional structures still funnel change through established rule-making processes. Congress remains fractured across party lines. The first 100 days will be measured not by sweeping monetary experiments, but by what the administration can push through regulatory channels and what financial institutions themselves signal as viable.

Where Stablecoins Fit the Picture

Chilean legal analysis in 2025 identified how the existing Fintech Law framework can accommodate and direct stablecoin usage into formal channels. This approach mitigates dollarization risks in the informal economy while preserving central bank monetary control. Near-term clarity on stablecoin policy would accelerate retail on-ramp accessibility and could independently drive Bitcoin adoption as users migrate toward the more volatile asset class.

The Real Tell: Follow the Banks, Then Watch the Pensions

The path to meaningful crypto adoption in Chile isn’t theatrical. It’s operational. If banks begin offering basic Bitcoin services—custody, trading, collateral integration—the retail foundation is set. Once that infrastructure matures, pension-system entry becomes possible, even if initial allocations are measured in single basis points.

This isn’t as compelling a narrative as a presidential decree making Bitcoin legal tender. But it’s a path with a realistic chance of scaling because it works with, rather than against, institutional architecture. Bukele’s approach captured global attention. Chile’s likely path will capture capital, and that matters more.

The scoreboard to watch: filings for local Bitcoin investment products, banking-sector custody announcements, and any regulatory circulars that expand eligible-asset definitions for pension funds or clarify valuation and custody standards for digital assets. Those mundane documents will do more to shape Chile’s crypto future than any speech from La Moneda.