After battling in the courts of Chile for years, a crypto exchange in the country has succeeded in opening a bank account in Bci.
This is a financial institution that came up with a protocol for catering to crypto-related businesses. A local exchange called Buda was the first one to open a bank account.
The crypto exchange was able to accomplish this after fulfilling the requirements that had been outlined by the bank in the protocol.
Protocol for crypto exchanges
A bank in Chile named Bci announced on October 28th that it had developed a protocol that would give crypto exchanges the ability to open a checking account with it.
This is a major milestone for all crypto exchanges in Chile, as they had been engaged in a court battle for years in order to gain access to traditional banking services.
There are a series of requirements that is included in the developed protocol and the bank got its inspiration for these from the recommendations that the Financial Action Task Force (FATF) had issued.
These include the traceability of transactions, the adherence to compliance procedures, the prevention of financing of terrorism and money laundering as well as audit reports from a third-party company.
According to a spokesperson for the bank, this move would prove to be a good one for the users of the crypto exchanges.
The bank asserted that its goal was to assist the customers of the crypto exchanges and to allow them to operate in the market in a framework of trust and security.
Banks in Chile and crypto exchanges have been locked in battle in the courts since 2018 and the battle was kicked off by two local crypto exchanges, Crypto MKT and Buda.
The two exchanges had launched a legal battle because their accounts had been shut down, but they wanted to be able to enjoy traditional banking services.
However, it should be noted that the legal battle is still ongoing, as the crypto exchanges claim that banking institutions in Chile are abusing their power for crippling the potential competition.
They claim that crypto and other alternate financial systems can pose a problem for banks, due to which they are so opposed to supporting them.
One of the crypto exchanges still involved in the ongoing legal battle is Buda and it became the first one of its kind to open an account with Bci in Chile after it signed an agreement with the financial institution.
This agreement also permits other crypto exchanges to avail of banking services from the institution, but they would have to meet the requirements outlined in the established protocol.
Guillermo Torrealba, the chief executive of Buda, said that they were pleased with the development and grateful for the vision of Banco Bci.
The CEO said that cryptocurrencies would become a fundamental part of banking soon and they just wanted to speed up the process.
Other Latam countries have seen banking institutions have a more positive attitude towards crypto-related businesses.