The law proposed more than two years ago considers cryptocurrencies to be the country’s virtual assets and establishes the Central Bank of Uruguay as the regulator and overseer of companies seeking to provide cryptocurrency services. The law puts Uruguay at the forefront of Latin American countries that have included cryptocurrencies in their regulatory frameworks.
Uruguay enacts cryptocurrency law after more than two years of discussion
President Luiz Lacalle Pou recently signed Law 20.345, a bill regulating the use of Bitcoin and cryptocurrencies. The law puts Uruguay in a favorable position, providing clear guidelines for companies that want to provide cryptocurrency-related services.
The Central Bank of Uruguay will regulate virtual asset service providers (VASPs) and will need to issue operating licenses to such organizations. These licenses will be issued taking into account "legality, timing and convenience." Similarly, the Financial Services Superintendent (SSF) will need to identify exchanges, wallets, and even miners that fall into the VASP category.
The law amends the existing anti-money laundering and counter-terrorism financing control regulations to include virtual assets in the control and supervision of current law enforcement organizations. In addition, it reforms the securities law and introduces the concept of decentralized securities, which are "electronically issued, stored, transferred and traded through distributed ledger technology."
The current law is inspired by a framework proposed by the Central Bank of Uruguay in 2021, which is the product of the institution’s research on the subject of cryptocurrencies. The lower house approved the bill in December 2022, having initially been introduced in September. Nevertheless, it had to undergo a series of amendments before it could be passed and signed into law.
The project’s approval makes Uruguay one of the few countries to include cryptocurrencies and cryptocurrency service providers in its regulatory framework, following in the footsteps of Venezuela, Brazil, Argentina, and El Salvador. However, only the last country has established Bitcoin as legal tender.