Chile's Regulatory Focus on Stablecoins and Its Implications for Fintech Growth

Chile's 2025 Fintech Law (Law No 21.521) has redefined the country's approach to stablecoins, positioning it as a regulatory innovator in Latin America. By legally recognizing fiat-backed stablecoins as legitimate financial instruments on distributed ledger technologies (DLTs), Chile has created a framework that balances innovation with systemic stability. This regulatory clarity is not just a legal formality-it's a catalyst for institutional investment and a driver of financial inclusion in emerging markets.

A Regulatory Framework Built for Growth

The Fintech Law explicitly allows non-bank entities to issue stablecoins, provided they are fully backed by fiat reserves and comply with Central Bank standards according to Chambers Practice Guides. This functional approach distinguishes Chile from rigid frameworks like the EU's MiCAR, opting instead for flexibility that accommodates technological evolution. By integrating stablecoins into its monetary infrastructure, Chile has effectively created a "third layer" of financial systems, complementing traditional central bank money and commercial bank credit.

This legal innovation has attracted global attention. For instance, the Financial Market Commission (CMF) recently authorized Fintoc Pagos, a special joint-stock company, to issue prepaid payment cards, streamlining business transactions and expanding payment innovation according to This Week in Fintech. Such initiatives underscore how regulatory clarity reduces uncertainty for fintech startups and institutional investors alike.

Institutional Investment: A Ripple Effect

While specific investment inflow figures for Chile's stablecoin sector remain elusive, global trends suggest a strong correlation between regulatory clarity and capital flows. In 2025, stablecoin transaction volumes reached $4 trillion annually, with 30% of all on-chain crypto transactions involving stablecoins. Chile's legal framework aligns with international standards, such as reserve asset requirements for high-quality liquid assets (HQLA), which are now mandated in the U.S., EU, and UAE according to Visa's Economic Empowerment Institute. This alignment makes Chile an attractive jurisdiction for institutional players seeking compliance-ready markets.

Moreover, Chile's macroeconomic stability-ranked among the most open economies in Latin America-has historically drawn foreign direct investment (FDI). In 2025, FDI to GDP ratio reached 85%, with financial services and data centers emerging as key sectors according to U.S. State Department. The Fintech Law's emphasis on open finance, including standardized APIs for interoperability, further enhances Chile's appeal by reducing operational friction for cross-border fintech ventures according to Chambers Practice Guides.

Financial Inclusion: Bridging the Gap

Chile's stablecoin regulations are also reshaping financial inclusion. With over 410 active fintech companies, many leveraging AI to improve credit scoring, the country is addressing long-standing barriers to access. For example, stablecoins are being used as a hedge against inflation (currently 4.4% in 2025) and to facilitate cross-border payroll systems for remote workers, who now rely on platforms like TransFi to receive USDC- or USDT-backed payments according to TransFi's blog.

The Fintech Law's allowance for non-bank entities to issue payment instruments has expanded access to underbanked populations. By 2025, approximately 3.69 million Chileans were using crypto services, a figure projected to grow as stablecoins become embedded in everyday transactions. This growth is supported by the CMF's oversight of digital asset service providers, ensuring compliance with anti-money laundering (AML) and know-your-customer (KYC) standards.

Global Context and Future Outlook

Chile's approach mirrors a broader global shift. The U.S. passed the GENIUS Act in 2025 to establish a federal regime for payment stablecoins, while jurisdictions like Hong Kong and the UAE introduced reserve requirements according to Trmlabs' Global Crypto Policy Review. These developments signal a regulatory convergence that prioritizes stability without stifling innovation. For emerging markets, Chile's model offers a blueprint: clear legal definitions, functional oversight, and integration with traditional systems.

However, challenges remain. While Chile's regulatory environment is robust, permitting processes for infrastructure projects are still complex. Additionally, the absence of granular Q3 2025 investment data for stablecoins highlights the need for more localized metrics to quantify the sector's impact.

Conclusion

Chile's regulatory focus on stablecoins is a testament to the power of forward-thinking policy. By creating a framework that balances innovation with oversight, the country has positioned itself as a hub for fintech growth. For institutional investors, this means a market ripe for capital deployment in compliant, scalable solutions. For emerging markets, it offers a pathway to financial inclusion through accessible, efficient digital tools. As global stablecoin adoption accelerates, Chile's 2025 reforms may well serve as a template for the future.