Uruguay Takes Lead in LATAM Crypto Regulation with New Law

Uruguay Takes Lead in LATAM Crypto Regulation with New Law

Uruguay is emerging as a leader in cryptocurrency regulation within Latin America following the recent signing of a new law by President Luis Lacalle Pou. This law grants the Central Bank of Uruguay the authority to oversee domestic cryptocurrency exchanges, marking a significant step for the nation's crypto industry.

The law has been positively received by industry leaders who believe it establishes Uruguay as one of the few countries in the region with a comprehensive legal framework for cryptocurrency. The Uruguayan Fintech Chamber has described the legislation as a vital framework that provides guarantees for the financial system and labels it a major milestone for the sector, which is experiencing an estimated annual growth rate of 44%.

However, the Fintech Chamber also expressed a need for clarity regarding the specifics of the Central Bank's regulatory approach. They emphasized the importance of understanding how the bank will implement the new regulations and are awaiting further details about the procedures and timelines for compliance from crypto operators.

The Central Bank began exploring options for cryptocurrency legislation in late 2021, eventually presenting a set of recommendations to the government. After modifications, the draft bill was submitted to parliament, where it was finalized and voted on last month.

This new regulatory framework follows similar measures enacted in countries like Brazil, Venezuela, and Argentina. El Salvador has taken a more progressive stance by granting Bitcoin legal tender status.

Under the new law, the Central Bank will hold supervisory and regulatory powers over cryptocurrency service providers. It will also establish a registration system, issuing permits only to those firms that meet specific criteria. Additionally, crypto exchanges, fund managers, and wallet operators must comply with anti-money laundering and counter-terrorism financing protocols. The legislation also updates existing securities laws to define key terms such as "cryptoasset."