President Luis Lacalle Pou recently signed the 20.345 Law, a bill designed to regulate the use of Bitcoin and cryptocurrencies in Uruguay. This law positions Uruguay as a leading country in crypto regulation. This provides clarity for companies wishing to offer crypto services.
According to the new law, the Central Bank of Uruguay will regulate VASPs. These entities must seek authorization to run their affairs according to the Central Bank approval criteria of ‘legality, opportunity, and convenience.’ The Superintendence of Financial Services (SSF) will also categorise VASPs, which include exchanges, wallets, and miners.
The law changes the current money laundering and terrorism financing laws, adding control and supervision of virtual assets. Further, it revises the country’s securities law to encompass decentralised securities, which are “issued, stored, transferred, and traded electronically” using DLTs, including blockchain.
This law is based on the model that the Central Bank of Uruguay suggested in 2021 when conducting research on cryptocurrencies. The bill was presented in Congress in September 2022, and the lower house passed it in December of the same year. However, it underwent a few changes before becoming law.
Uruguay has joined the list of nations regulating cryptocurrency, including Venezuela, Brazil, Argentina, and El Salvador. However, only El Salvador has made Bitcoin legal tender in the country.
Law 20.345 Strengthens Uruguay’s Role in Latin America’s Crypto Landscape
It seems that Law 20.345’s adoption occurred amid the growing trend of international calls for better regulation of cryptocurrencies. Despite the growing popularity of digital assets, regulators are now feeling the heat from consumers, financial stability, and concerns about criminal activities.
Countries like El Salvador, which made Bitcoin legal tender, and Switzerland, with its comprehensive crypto regulation, have shown that clear laws can support the crypto industry’s growth. Now, Uruguay is following in those countries’ footsteps. In this direction, it is taking active actions to influence the future of the financial industry.
Implementing the 20.345 Law is a milestone for Uruguay regarding the legal regulation of cryptocurrencies and blockchain technology. According to the law, the regulation of VASPs is set up to promote the transparency and proper functioning of the market, with the Central Bank and the SSF as the authorised supervisors. This move solidifies Uruguay’s position as a key player in Latin America’s crypto ecosystem. As a result, it could serve as a model for other nations balancing innovation with security.
