In a significant development for Latin America's crypto-landscape, Uruguay President Luis Lacalle Pou recently signed bill 20.345, regulating bitcoin and cryptocurrencies.
The bill was drafted over two years ago, however, officially now, cryptocurrency would be recognized as virtual assets in the country.
The law makes the Central Bank of Uruguay a significant regulator for virtual asset service providers (VASPs). The Central Bank will issue VASP permits under its supervision ensuring that crypto operations are as per the global standards of legality, opportunity, and convenience.
Superintendence of Financial Services, (SSF) shall identify and regulate exchanges, wallets, and miners classified under the VASPs.
This new framework amends the existing legislation regarding money laundering and financing terrorism, bringing virtual assets under the scope of current enforcement agencies.
The act also updated securities law to introduce decentralized securities, defined as those issued, stored, transferred, and traded electromechanically using distributed ledger technology.
The law was developed following an extensive study on cryptocurrencies and a framework recently proposed by the Central Bank of Uruguay in 2021.
It obtained approval in December 2022 after several modifications following its introduction in the Chamber of Congress at the lower level in September 2022. However, it is now that crypto is officially legalized in the Latin American country.
It is with this landmark ruling that Uruguay enters an exclusive list of countries integrating cryptocurrency and related services into its regulatory framework. Apart from Uruguay, Venezuela, Brazil, Argentina, and El Salvador have also integrated crypto into their legal framework.
However, El Salvador has designated Bitcoin as a legal tender, being the only Latin American country to do so.