Fifth Latin American Country Passes Crypto Law! Uruguay May Develop Decentralized Securities

Uruguayan President Luis Lacalle Pou recently signed the 20.345 law related to digital assets, making Uruguay the fifth country in Central and South America, following Venezuela, Brazil, Argentina, and El Salvador, to incorporate Virtual Asset Service Providers (VASPs) into its regulatory framework.

Uruguay Digital Law Mentions Decentralized Securities After Four Years of Experimentation and Legislation

The legislative amendments aim to establish clearer regulatory norms for Uruguay's cryptocurrency industry. The country's central bank initiated a series of experiments related to digital assets as early as 2021, using this as a foundation to gradually construct a regulatory framework. In December 2022, the relevant bill passed through parliamentary review, and the signing by the president marked the final step for the law to come into effect.

This legislation revises Uruguay's existing anti-money laundering (AML) and countering the financing of terrorism (CFT) laws to include digital assets under regulatory oversight. Additionally, the law also reforms Uruguay's securities law, introducing for the first time the concept of decentralized securities, enabling electronic issuance, storage, transfer, and trading through distributed ledger technology (DLT).

SSF to Oversee Actual Regulation, Uruguay Digital Assets Law Officially Enforced

The Central Bank of Uruguay serves as the nominal regulatory authority responsible for issuing operating licenses to Virtual Asset Service Providers (VASPs). However, the actual regulatory tasks, such as identifying various service providers as exchanges, wallet services, or miners, will be carried out by the country's financial services supervisory authority, Superintendencia de Servicios Financieros (SSF). The SSF is tasked with categorizing and monitoring the operations of different types of VASP businesses to ensure compliance with legal requirements.

Furthermore, this law is expected to attract more international investors, as with a clear regulatory framework, cryptocurrency companies can operate in a more legal and transparent manner. This not only provides a more stable development environment for the local market but also strengthens the country's position in the international cryptocurrency market, promoting innovation and development in the country's financial technology sector.

Uruguay's signing of this law signifies significant progress in the field of digital assets, and with the law now in effect, Uruguay is poised to become a key player in cryptocurrency and financial technology development in Central and South America. The context of its development can also serve as a reference for Taiwan, which recently announced the draft regulations for VASP registration and anti-money laundering measures.

Financial Supervisory Commission announces new regulations on "Anti-Money Laundering for Virtual Asset Service Providers": Abolishing the declaration of anti-money laundering, operators must complete the registration within three months.