Uruguay has emerged as a leader in Latin American crypto regulation with the passing of Law 20.345, signed by President Luis Lacalle Pou after more than two years of work.
What Does the New Law Entail?
The new legislation officially recognizes cryptocurrencies as virtual assets and designates the Central Bank of Uruguay as the primary regulator for crypto service providers. Under this law, virtual asset service providers (VASPs) must obtain permits from the Central Bank to operate legally.
“For the first time in Uruguay, a basic framework has been established that recognizes and legislates on the existence of cryptoassets,” stated the Uruguayan Fintech Chamber (CUF).
Key Highlights of the Uruguay Crypto Regulation Law:
- Cryptocurrencies are recognized as virtual assets.
- VASPs must obtain permits from the Central Bank.
- The Central Bank becomes the main regulator.
How Does This Impact Existing Regulations?
Law 20.345 expands the scope of money laundering and terrorism financing regulations to include virtual assets. It also introduces decentralized securities under the existing securities law.
The Superintendence of Financial Services (SSF) will be in charge of identifying and classifying entities like exchanges, wallets, and miners that qualify as VASPs.
What’s the Industry’s Response?
The Uruguayan Fintech Chamber (CUF) has welcomed the Uruguay crypto regulation law but calls for more clarity on implementation, forms, and deadlines.
Industry Concerns:
- Clarity on implementation: The CUF called for more details on how the Central Bank will execute this regulation.
- Forms and deadlines: Crypto operators are awaiting specifics on operational requirements.
How Does Uruguay Compare to Other Latin American Countries?
With this new crypto regulation law, Uruguay joins other Latin American countries like Venezuela, Brazil, and Argentina that have incorporated crypto into their regulatory frameworks. However, only El Salvador has made Bitcoin ($BTC) legal tender.
Uruguay vs. Latin America:
- El Salvador: Bitcoin as legal tender.
- Uruguay: Robust crypto regulation, but no legal tender status for cryptocurrencies.
Uruguay’s fintech industry is reportedly growing at a rate of 44% annually, demonstrating the significance of this regulatory shift.
What’s Next for Uruguay’s Crypto Landscape?
As the Central Bank prepares to take on its new regulatory responsibilities, the crypto industry is eagerly waiting for further information on how this landmark law will be implemented and what it means for the future of digital assets in Uruguay.
