“Many things that I think need to be addressed are not talked about,” Sobral warned.
He points out that this is a consequence of “not understanding what they are regulating.”
The bill to regulate the cryptocurrency sector in Uruguay is advancing late, presents deep structural gaps and establishes prohibitive economic barriers that threaten to expel emerging companies from the local ecosystem.
This was argued by Juan Manuel Sobral, president of the Blockchain Chamber of Uruguay and co-founder of SpaceDev, who spoke with CriptoNoticias within the framework of the Be Orange event, held in Montevideo last Sunday.
Sobral affirms that the official proposal to regulate the sector is incomplete and rigid due to a traditional approach that, in his opinion, does not adapt to the nature of disruptive technology.
According to the specialist, the design of the regulatory framework, whose updating It was published in March and is in the process of public consultation, shows a lack of technical understanding on the part of local authorities, which generates conditions that, in their words, “kill startups” before they can consolidate their business models in the country.
Sobral questioned that currently companies in the sector that want to operate must have a security deposit of about $100,000. An amount that, in his perspective, “continues to be a very high immobilized capital that slows down the operation of smaller-scale businesses.”
The president of the union chamber described the economic situation as an “entry barrier” for companies in the sector, which creates a hostile environment for the development ecosystem. destroying the possibility of incubating projects in early stages.
Sobral warned about the danger of stifling local innovation:
What is happening now is that they kill startups. Which is what worries me the most. Nobody is going to want to do anything because it is not legal to found a company here. Nobody understands anything, but you can’t invest in those things. But you’re also not stopping people from trying. I do think that if you set very high requirements that they cannot meet to be included in the registry, those companies will disappear. Well, I don’t think they’ll go away. I think they are going to open somewhere else.
Juan Manuel Sobral.
The project “excludes” key elements of cryptocurrencies
One of the most critical points pointed out by the specialist is the complete absence of basic operational distinctionssuch as the differentiation between service providers that custody funds and those that operate in a non-custodial manner.
For him, what the project does is that all companies, without distinction, obtain authorization from the Central Bank of Uruguay (BCU), “even asking for guarantees from non-custodial platforms and placing responsibilities for any problem on companies that operate in this way.”
“I think that the current regulations are too focused on replicating the regulation of the exchange market or the stock market, leaving out countless business applications that are happening right now and that make no sense to ignore,” he said.
According to Sobral, the regulatory body’s proposal requires the same authorizations and economic guarantees for business models. that are completely different in their execution and level of risk.
For the interviewee, this rigidity prevents the development of innovative tools that are already used in other nearby jurisdictions, such as Argentina, Bolivia and Peru.
The enthusiast also noted that the proposed regulatory framework leaves the development of non-fungible tokens (NFT) and the tokenization of real-world assets (RWA) in legal limbo. And he emphasized that, if the country is going to implement a law that will take years to modify, it is essential to consider these tools from the beginning.
«There is no talk of tokenization, there is no talk of NFT, there is no talk of many things that I think need to be discussed. And I think that if we are going to regulate something that is going to lead to the regulation having to be modified in four years, it has to be considered,” he expressed.
Sobral was direct in pointing out that the “exclusion of key elements” of the regulatory project, which is estimated to come into force at the end of this year, is due to the ignorance of local authoritiesbecause “they do not understand what they are regulating.”
Furthermore, he warned about the lack of basic operational differentiation and the replication of analog financial models on the cryptoasset market. For him, these They are the main triggers of unrest in the Uruguayan industry.
Faced with this scenario, the Blockchain Chamber of Uruguay was driven to submit a report with detailed critical comments on the regulatory project of the Central Bank of Uruguay. In it they also present their own proposal to regulate the sector.
However, the direct consequence of this rigidity is not the eradication of projects, but rather international regulatory arbitration. Given the obstacles in Montevideo, local developers could choose to register their firms in jurisdictions that offer greater flexibility and lower opening costs, operating remotely and depriving the Uruguayan State of tax collection and formalization of the sector.
Sobral concluded that «Uruguay does not sell Uruguay. Uruguay sells to the world. You have to think that, if you don’t found a company here, you go and found a company in some regulation that allows you to do it remotely. I open a company in Panama that I have to pay $2,000 per year, or I open a company in the United States and that’s it. And we lose that possibility of regulating the local market.