Bitcoin Emerges As A 2025 Election Issue In Chile

Bitcoin's environmental and macro-economic implications have vaulted the cryptocurrency from a niche policy matter into the thick of Chile's presidential race

Bitcoin’s environmental and macro-economic implications have vaulted the cryptocurrency from a niche policy matter into the thick of Chile’s presidential race, with advisers to every major contender treating the asset—and the mining industry that underpins it—as a potential vote-winner rather than a liability.

New Zealand-based ClimateTech venture capitalist Daniel Batten told his followers on X that “Bitcoin is shaping as an election issue for Chile in 2025.” He added that after meetings on both sides of the aisle, no serious candidate now opposes the technology, because “being against Bitcoin is like being against the Internet: political suicide.”

Behind Batten’s assessment stands a two-year, largely low-profile lobbying campaign led by Chilean software-engineer-turned-policy-advocate Andrés Villagrán. Since 2023 Villagrán has been shepherding US strategist Dennis Porter, chief executive of the Satoshi Action Fund, through committee rooms in Santiago and regional capitals, pitching Bitcoin mining as an antidote to the country’s worsening renewable-energy curtailment problem. In a post on 18 May he reported “Great progress in Chile this week! Met w/ presidential candidates on Bitcoin & its role in clean energy/efficiency. Pushing for inclusion in programs.”

As part of the Bretton Woods institutions' efforts to rebuild the global financial system after World War II, the International Monetary Fund (IMF) introduced a standard set of rules for managing foreign exchange and monetary reserves. These rules, also known as the "articles of agreement," were adopted by the IMF's executive directors at its first meeting in March 1946, and came into effect on December 27, 1945, with the USSR being the only country to vote against them.

The rules limited the types of assets that central banks could hold in their reserves, focusing mainly on convertible currencies like the U.S. dollar, the British pound sterling, the Japanese yen, the euro, and the Canadian dollar, as well as gold. The goal was to promote stability and liquidity in the global financial system by standardizing the assets that central banks held and encouraging cooperation among them in managing those assets.

However, the rapid development of digital assets and the increasing interest in cryptocurrencies like Bitcoin have raised questions about whether the existing IMF rules can accommodate these new technologies and assets.

The Central Bank of Chile, in an opinion submitted to the Senate Finance Commission in response to a request for observations on the SBR bill, expressed concerns that including Bitcoin among the legal monetary reserves might not align with the IMF's reserve-management rules. The bank's statement, dated 14 June and obtained by CoinDesk, highlighted the potential implications for the country's image and economic stability.

"The Central Bank considers that it may be pertinent to adjust the legal framework to incorporate digital assets in the monetary reserves, taking into account the observations of the international organizations to which Chile belongs, especially the IMF, in order to avoid any risk of non-compliance with the rules and regulations established by these organizations," the statement read.

The potential inclusion of Bitcoin in Chile's monetary reserves has sparked debate among economists and policymakers. Some argue that it could provide new opportunities for portfolio diversification and macroeconomic stability, especially given the country's abundant renewable energy sources and the energy-intensive nature of Bitcoin mining.

"The Bretton Woods institutions have never envisaged decentralized cryptocurrencies in their models for the world economy, despite the fact that several of the problems they aim to solve—like dollar hegemony, carbon emissions, and global poverty—are problems that Bitcoin may help solve,” said Dennis Porter, chief executive of the Satoshi Action Fund, a non-profit focused on promoting Bitcoin adoption.

Others, however, caution against hasty decisions and suggest that more research is needed to assess the long-term economic and legal implications of such a move, especially given the high volatility and liquidity risks associated with crypto assets.

The issue is expected to come to a head in the second half of the year, as the Finance Ministry prepares to engage in further sessions with the Central Bank to discuss the SBR bill in greater detail. The outcome could have significant implications not only for Chile but also for other Latin American economies, which are increasingly interested in exploring the potential of Bitcoin and other digital assets.

As of Monday morning, BTC was trading at $105,385.