Chilean lawmakers are pushing for the creation of a Bitcoin strategic reserve, but the country's Central Bank is opposed to the idea. If the initiative were to be approved, Chile could mark a milestone in the Latin American economy.
In a move that could redefine Chile's economic future, a group of lawmakers is pushing for the creation of a strategic Bitcoin reserve as part of the country's national reserves.
The initiative, backed by key figures such as Dennis Porter, CEO of the Satoshi Act Fund, and Simon Collins, CEO of Stackr, has sparked an intense debate between those who see Bitcoin as an opportunity to diversify the economy and those, such as the Central Bank of Chile, who warn about the risks of adopting digital assets.
Chilean lawmakers push for sovereign adoption of Bitcoin
The proposal to create a strategic Bitcoin reserve in Chile is not new, but it has recently gained traction thanks to the work of Andrés Villagrán, a Bitcoin adoption advocate and representative of the local mining sector. Villagrán has held meetings with more than 20 parliamentarians and government officials, including deputy Andrés Giordano and deputy Juan Santana, both close to President Gabriel Boric.
In November 2024, Villagrán and his team formally presented the idea of a Bitcoin strategic reserve to government representatives. The proposal included successful case studies of Bitcoin adoption in U.S. states such as Texas, Ohio, and Pennsylvania, where Dennis Porter has led similar efforts to incorporate the cryptocurrency at the state level.
“I have had meetings with more than 20 parliamentarians and several ministers explaining the benefits of Bitcoin for Chile and its people,” said Villagrán recently said: “Bitcoin is not only a tool to diversify our reserves, but also a way to protect our economy from global volatility.”
The efforts that Villagrán has led to integrate Bitcoin into the Chilean economy have earned him recognition from key figures in the sector, such as Daniel Batten, who shared his excitement about this initiative on X.
The support of Dennis Porter and Simon Collins
Dennis Porter, known for his work in promoting Bitcoin-friendly legislation in the United States, has been a key ally in this initiative. Through the Satoshi Act Fund, Porter has introduced more than 30 cryptocurrency-related bills and has advised local governments on how to integrate Bitcoin into their economic strategies.
For his part, Simon Collins, CEO of Stackr, has brought his experience in sustainable Bitcoin mining and in the creation of public policies that encourage the adoption of this cryptocurrency. Together, Porter and Collins have provided Chilean legislators with empirical data and tools to justify the viability of creating a strategic Bitcoin reserve for the country.
Villagrán said he met Porter and Collins in mid-2024 and has established a collaboration with both to present his proposal in a solid and well-founded manner.
The creation of the “Bitcoin Bank”
One of the most significant advances in this process has been the proposal by Gael Yeomans, a member of the Convergencia Social party, to create a “Bitcoin Caucus”. This parliamentary group would aim to study international legislation on Bitcoin, draft bills and improve the formulation of public policies related to the cryptocurrency.
Villagrán has backed this initiative, suggesting that the Bitcoin Caucus should include representatives from various political sectors, since Bitcoin is not a partisan issue, but a tool that can benefit the entire country.
However, despite the enthusiasm of lawmakers, the proposal to adopt Bitcoin at the sovereign level faces strong resistance from the Central Bank of Chile. In December, the body issued a statement ruling out the possibility of including the cryptocurrency in the country's national reserves, arguing that BTC does not meet the security, liquidity and quality criteria established by the International Monetary Fund (IMF).
“International reserves are intended to maintain economic and financial stability in the face of adverse external shocks,” the Central Bank explained. “Bitcoin and other cryptoassets do not meet the legal criteria to be used in the investments of the Central Bank of Chile.”
The Central Bank also highlighted Bitcoin's high volatility as a significant risk. "The fluctuating nature of this cryptocurrency makes it incompatible with the stability objectives we pursue," the agency added.
Latin America leads the sovereign adoption of cryptocurrencies
Despite opposition from the Central Bank, Villagrán and his team remain optimistic. They plan to present the proposal to the Ministry of Finance, senators and deputies during the course of this year, in the hope of generating a broader debate on the issue.
If Chile were to approve this initiative, it would become one of the first countries in the world to adopt Bitcoin as a national reserve, marking a milestone in the Latin American economy. In addition, it would set a precedent for other countries in the region that are exploring ways to diversify their reserves and protect themselves from global volatility with this cryptocurrency, such as Brazil.
Brazilian lawmakers are currently debating a bill, the proposal 2471228, which seeks to allocate a significant portion of national foreign exchange reserves to Bitcoin.
The introduction of this proposal in Brazil and the initiative promoted by Chilean legislators reflect a growing trend in a Latin America that is increasingly interested in exploring the advantages of cryptocurrencies as tools for economic diversification.
