The promulgation of Bill 20,345 to regulate the bitcoin (BTC) sector and other cryptocurrencies in Uruguay is one of the most striking news in Latin America that has occurred in recent weeks.
The South American country took a step forward in terms of regulation, now being among the pioneers not only in the region but in the worldA point that favors the growth of the country’s ecosystem, taking into account that, until now, there are few jurisdictions that have defined a specific legal framework for the sector.
As CriptoNoticias reported, the new law places Uruguay at the head of Latin American countries, along with El Salvador, Brazil, Argentina and Venezuela, which have the most advanced regulations. This fact not only has global implications, but also within the country, where a debate has been opened around the repercussions of the legislation.
Some Uruguayan jurists and members of the country’s Fintech ecosystem have spoken on this topic. His impressions about the law can be summarized in three keys, which highlight the importance of regulation. Let’s review them below.
A before and after for the Uruguayan ecosystem
One of the first entities to speak out on the law was the Uruguayan Chamber of Fintech (CUF), which congratulated the measure taken by the country’s authorities.
He highlighted, in this sense, that this is the first step to begin addressing operations with cryptocurrencies, giving recognition to an area that increasingly captures the interest of users in that nation.
“For the first time in Uruguay, a basic framework is established that recognizes and legislates on the existence of cryptocurrencies, a reality that is already firmly established in the global sphere,” said the CUF, highlighting the fact that the government assume them as assets and not as fiat currency.
This establishes principles and guidelines for asset trading, giving guidelines so that exchanges and other companies in the sector can offer services in accordance with clear and established legal provisions, according to the CUF.
This is why for the Uruguayan Chamber of Fintech the law represents “an important milestone”, as it provides the necessary guarantees for sustainable growth of companies that operate with these assets.
In the long term, this law has the potential to transform the financial landscape in Uruguay, attracting new investors and companies in the fintech sector. In addition, it provides a solid foundation for the development of new technologies and financial services based on virtual assets, which could position Uruguay as a benchmark in the region.
Uruguayan Chamber of Fintech.
This is a position shared by the Uruguayan lawyer Juan Echeverría, who in statements to the media and on their social networks has been highlighting the importance of the classification of cryptocurrencies that the law states.
This refers to the four different categories established by the Central Bank of Uruguay in the project. Namely: “value” currencies, “utility” currencies, “stablecoins” and “others”. Something that Echeverría interprets as “a crucial step towards a more transparent regulatory environment.”
Echeverría draws attention to the demands that will be made to cryptocurrency platformsnow identified as Virtual Asset Service Providers (PSAV). These companies must register and comply with KYC (know your customer) regulations.
«Uruguay is heading towards a form of structured regulation, which marks a new time for the sector and focuses on classifying the different types of digital currencies, implementing measures against money laundering and financing of terrorism, as well as protecting investors» , concludes the expert.
A challenge for its implementation
However, the law also triggers a series of challenges. The first of them has to do with the effective implementation of the law by the Central Bank of Uruguay.
It is expected that in the coming months the organization determine the regulation that will give floor to the regulation. This, through a series of regulations that will include the steps for registering platforms, and the rules and requirements that members of the ecosystem must comply with to continue operating.
For the Fintech Chamber, it is crucial to understand how this regulation will be carried out and what the estimated deadlines for its execution will be. Likewise, it will be important for companies to have the ability to quickly adapt to new legal and operational requirements. It is the only way in which it will be possible to guarantee “that the sector continues to grow sustainably.”
“The first big step is just being taken for the sector in our country, which for several years has played a leading role in the regional Fintech ecosystem and in that of virtual assets,” comments the CUF.
In that sense, we still have to wait to see how the law is applied in the early stagesand how the challenges of this initiative are overcome. Something that will begin to take shape in the coming months. The long-term aspiration of the sector is for the country to move towards a more complete regulation of the ecosystem.
Uruguay, on par with other jurisdictions globally
As detailed in Criptopedia, CriptoNoticias’ Bitcoin education academy, the legality of BTC and cryptocurrencies is still an area under exploration. The rules vary from country to country, covering a spectrum from permissive to restrictive and even hostile.
A large majority of the world’s jurisdictions have not yet established laws for this ecosystem, some others use existing regulations and try to adapt them to cryptocurrencies. A large majority still lacks regulation for bitcoin.
Among the jurisdictions that stand out on the map for having regulations, the European Union, Switzerland, Ukraine, Gilbratar and Malta stand out, along with several countries in Asia. Latin America is falling behind in this movement, despite the fact that many bills have been released that are still without approval. A situation that was highlighted by the panelists who recently participated in the Blockchain Summit Latam.
However, the panelists observe that in Latin America regulators are showing a new attitude, a desire to want to do things right. It is thus observed that everything indicates that the increasing levels of adoption are forcing governments to enact regulations, just as happened in Uruguay. That is why the new law of the South American country can set a significant tone for the regulatory advancement of the region.
