(Photo: Finance Commission, Senate of Chile)
The year 2021 has been a year marked by political, economic and social events relevant to this new century in Chile. Among the most important facts for the financial technology industry, we will describe the main events and their advances.
On March 3, 2021, the Central Bank of Chile (BBCh) submitted for consultation a regulation associated with the creation of Clearing Houses for Low-Value Payments (CCBV) that would reduce the risks of settlement and compensation for low-value payments. value in non-bank entities that participate in the payment system. This would include transfer of funds (TEF) transactions and non-bank payment cards.
On May 15 and 16, 2021, elections were held to elect the 155 citizens who will draft a new Constitution for Chile. Check the final results reported by the Chilean Electoral Service (Servel) by clicking here and of the Constitutional Convention here. You can also review the regulations approved by the commissions, by clicking here.
On Friday, September 03, 2021, the Ministry of Finance entered the first constitutional procedure in the Chamber of Deputies and Deputies the bill to promote competition and financial inclusion through innovation and technology in the provision of financial services ( Bulletin No. 14,570-05) or "Chile's Fintech and Open Finance Bill". To review the bill, you can click here.
On September 22, 2021, Mario Marcel, president of the Central Bank of Chile (BBCh), in the framework of the Seminar organized by the Ministry of Treasury and the Inter-American Development Bank (IDB) called "Innovation in the Financial Industry: a Boost for Reactivation and Financial Inclusion", presented the agenda on retail payments. To learn more about the exhibition, you can click here.
On November 21, 2021, the parliamentary elections for the period 2022-2026 were held, together with the presidential election and the regional councilor elections, where 155 deputies and 27 senators were elected for the Chamber of Deputies and for the Senate. of the Republic of Chile, respectively. Check the preliminary results reported by Servel by clicking here.
On December 2, 2021, InBest Chile and the Ministry of Finance, within the framework of Chile Day London 2021, presented the "Chilean Fintech and Open Finance Bill". In addition, the panel included the participation of the Commission for the Financial Market (CMF), the National Productivity Commission, the Data and Financial Technology Association and the Ministry of Finance. To review the presentation, you can click here, and also here.
On December 11, 2021, the Production Development Corporation (CORFO) held the International Entrepreneurship and Innovation Meeting, with a "Fintech" business conference where our Co-founder and Finance Director Dennis Vivas Zelada participated presenting FintechLab, and its “Fintech as to Service”. The meeting was also attended by Paula Valenzuela, Director of the Stock Exchange de Santiago, Hernan Orellana, Director of the Investment Credit Bank, Ángel Sierra, Executive Director of FinteChile, among other personalities from the Fintech industry in Chile.
(Photo: Emprende tu Mente - EtM Corfo 2021)
On December 16, 2021, the Financial Market Commission approved the regulations of the financing platform “ScaleX Santiago Venture Exchange”. José Antonio Martínez, general manager of the Santiago Stock Exchange, added: 'This is a new step in the development of an alternative financing market for startups, a platform for the thousands of developing companies that today are looking for an opportunity to grow.' To review the press release, you can click here.
On December 19, 2021, the winner of the second round of the presidential elections in Chile for the period 2022-2026 was crowned the candidate Gabriel Boric Font achieving 4,620,890 votes, 55.87% of the total vote. To see the preliminary results of the vote, you can click here.
On December 20, 2021, the urgent discussion of the second constitutional process began in the Finance Commission in the Senate of the Republic of Chile on the Fintech and Open Finance Bill of Chile. In this instance, it had the presentation of the Ministry of Finance, the Central Bank of Chile and the Commission for the Financial Market. To review the discussion you can click here, here ,here and here.
On December 22, 2021, the Central Securities Depository (DCV), Diario Financiero, FinteChile and EY Chile, presented the results of the third version of the Fintech Expectations Survey 2022. To learn more about the results, you can click here and also here.
What do we expect for the Fintech industry in Chile in 2022?
Senate of the Republic of Chile
On March 8, 2022, the discussion of the second constitutional proceeding continued in the Finance Commission in the Senate of the Republic of Chile regarding the Fintech and Open Finance Bill of Chile. In this instance, it had the exhibition of the Association of Banks of Chile (ABIF), the FinteChile Association and the company Buda. To review the discussion you can click here.
After this, the Senate Finance Commission will continue with the discussions of the Fintech Law project, analyzing issues such as the regulation of crypto assets, inviting institutions such as the Internal Revenue Service (SII), the Central Bank of Chile (BCCh), among others. other institutions to continue the process.
Chilean Ministry of Finance
Although it is true, the Ministry of Finance has been leading the implementation of the Fintech and Open Finance Bill of Chile, reiterating and highlighting the urgency of immediate discussion of the aforementioned bill in the Senate Finance Committee, we hope that the entry into force of the aforementioned bill is carried out with the entry of the new government from March 2022.
Mario Marcel took over as Finance Minister of the new Government of President Gabriel Boric. With the new leadership, we expect strong support from the ministry to continue with the efforts to bring the Fintech Law into force.
Commission for the Financial Market (CMF)
With the approval of the aforementioned bill, the Financial Market Commission expects that more than 100 entities will be incorporated into the Commission's perimeter and the regulated entities will be able to provide this type of service according to their nature, with new products such as insurance parametric and inclusive insurance, as well as a new market infrastructure for Open Finance, and a new paradigm of supervision and regulation of services provided by people versus algorithms.
Central Bank of Chile (BCCh)
For its part, the Central Bank of Chile (BBCh) hopes that the Low Value Clearing Houses (CPBV) can start operating soon, as they are a very important step for the expansion of instant payments in the country. Thus, on January 25, 2022, a new regulation was published that authorizes the creation and regulates the operation of the Low-Value Payments Clearinghouses. For more information, you can click here.
In addition, going forward, the BCCh's payment agenda will have a strong emphasis on crypto assets, both those of private issue and "stablecoins", as eventually those of own issue of a digital peso, where the aforementioned bill already provides ́ an adequate framework for the regulation of "stablecoins".
Finally, the BBCh, based on objectives linked to the needs of the public, which are financial stability and the effectiveness of monetary policy, will define options and requirements for the issuance of a Digital Peso in Chile at the beginning of 2022.
Santiago Stock Exchange (BCS)
With the recent approval of the regulations for the operation of the financing platform for startups "Scalex Santiago Venture Exchange", by the Commission for the Financial Market (CMF), we expect that the first transactions will be completed at the beginning of 2022, although officially the terms that are handled are more conservative and point to the initiative being operational during the second quarter. It is estimated that between 5 and 10 firms will raise capital in 2022.
In addition, we look forward to the consolidation of the Auna Blockchain Ecosystem, where FintechLab is one of the first business partners, with more corporate companies deploying new and/or improved digital financial businesses.
Government of Gabriel Boric Font
The new government that assumes for the 2022-2026 presidential period with the current president-elect, Gabriel Boric Font, we hope that he will begin the application of his < a href="https://boricpresidente.cl/propuestas/implementacion">Program implementation agreement, as well as its Proposals for the growth.
By July 2022, the Constitutional Convention will meet the deadline for the presentation of the draft of the proposal for the new constitution. After that, a ratification or exit plebiscite will be held again, in which Chileans will choose whether to approve or reject the new proposed Magna Carta. If the proposal is approved, Chile will have a new Constitution and the 1980 text will be replaced. In the event that it is rejected, the current Magna Carta will remain in force.
Finally, the new Chilean Senate and the Chamber of Deputies, fragmented into different political positions, as well as better balanced in political ideologies, would be an important political counterweight to the executive power, being a "respite" to mitigate the social protests that They happened last October 2018.
FinteChile Association
Of the more than 220 financial technology companies in Chile, we expect the trend of raising capital rounds by startups with increasingly higher investments (between USD 1 to USD 4 million for seed capital rounds) to continue. ) with more sophisticated legal figures in jurisdictions such as the United States, Canada, among others, that allow startups to attract venture capital investment funds specialized in the fintech industry.
In addition, we expect greater strategic alliances between corporate companies and startups through "Corporate Venture Capital" that allows them to incorporate new technological trends such as blockchain (Blockchain) to enable new and/or improved digital financial business models.
Finally, we see a natural process of consolidation of financial technology companies with mergers and acquisitions as a mechanism for companies from developed countries to quickly enter the Pacific Alliance market.