Uruguay is at the head of the Latin American countries that have their Bitcoin Law

With the signature of President Luis Lacalle Pou, Bill 20,345 to regulate bitcoin (BTC) and other cryptocurrencies was promulgated in Uruguay, placing the South American country on the list of the few nations in the region that has a specific legal framework for this ecosystem.

In this way, the new law of Uruguay It adds to the specific regulations for the cryptocurrency industry. So far, these have been approved in countries such as Brazil, Venezuela, Argentina, and El Salvador, the latter being the most advanced in regulatory matters in the region. for having the most complete legal framework and being the only one to give bitcoin legal tender status.

Law 20,345 approved in Uruguay is a project that – unlike most projects presented or approved in other countries – has the particularity having been created by the National Executive.

The proposal was presented more than two years ago by the Central Bank of Uruguay (BCU) and was then sent to the Executive Branch, which was in charge of redirect it towards the Legislative power, where it went through a series of phases for its approval and promulgation this September.

The legislation has its origins in the Conceptual framework for the regulatory treatment of Virtual Assets in Uruguaywhich was prepared in December 2021 by the BCU. It arose from research carried out by the Uruguayan monetary entity, from which it presented definitions and basic notions for regulation in order to identify each element or actor within the ecosystem.

Based on this series of definitions, the BCU delimited the activities of the cryptocurrency ecosystem that it considers plausible to be regulated under its orbit. What applies, for example, to providers of virtual asset services related to “investment and capital raising”.

This is how the provisions of the new Uruguayan law establish legal criteria and standards that give cryptocurrencies legal recognition in the country as virtual assetsbut not as fiat currencies.

In this sense, the Central Bank of Uruguay is assigned the function of supervising, regulating and registering companies that operate in this sector, as this market is inserted into the general financial system. To this end, it will soon be commissioned to prepare and present a regulation.

Broadly, the legislation does not focus on the use of cryptocurrencies as a payment or exchange method, but rather as an investment asset. To this end, it establishes the creation of regulations along with the application of some changes to current regulations:

• Virtual Asset Service Providers Law: the regulations create the figure of service providers linked to virtual assets (PSAV) to identify exchanges, wallets, and even minerswhich will be supervised and supervised by the BCU together with the Superintendency of Financial Services (SSF). The PSAVs must request authorization from the BCU to operate, and to grant the permit “reasons of legality, opportunity and convenience” will be taken into account. The figure of Virtual Asset Issuers (EAV) also arises.

• Money Laundering and Terrorist Financing Control Law: it is established that PSAVs must also be supervised and supervised in terms of money laundering and terrorist financing controls.

• Securities Market Law: modifies article 14 by including virtual assets within the definition of book-entry securities. Therefore, it is introduced the concept of decentralized book-entry securitiesunderstood as those that are “issued, stored, transferred and negotiated electronically through distributed ledger technologies.”

As CriptoNoticias has reported, the approval of this bill is known in a context in which other Latin American nations are still expected to advance their own proposals for regulating the bitcoin market. As most experts point out, until now regulatory processes have been highly fragmented.

It is expected that, as in Uruguay, the laws will progressively take shape, especially considering the notable growth that the sector is experiencing throughout the region, which is manifested in an increasingly evident way with the rise in adoption.