Uruguayan central bank proposes to regulate cryptocurrencies in the country

The Central Bank of Uruguay (BCU) reported this week that it is evaluating market regulation in light of the recent increase in the use of cryptocurrencies in that country. This with the support of a work team dedicated to studying the instruments and operations with these digital assets. To achieve this goal, the state is ready to change existing laws.

So you do a detailed analysis of the â ????Usabilityto???? with digital assets. They believe that by the end of this year they could have a proposal to amend the current legislation with a clear framework that will allow progress in regulating these activities. This will help to better adapt to the introduction of new cryptocurrency-oriented rules in the future. As described in the declaration.

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Uruguayan central bank proposes to regulate cryptocurrencies in the country
Uruguayan central bank proposes to regulate cryptocurrencies in the country

The BCU stated that due to their characteristics, some digital assets â ???? They favor anonymity and reversibility of transactionsâ ???? which can expose the operator to considerable risks. As with money laundering, fraud or terrorist financing.

In a statement published on its official website, the issuing body stated that in the course of 2021 an internal working group was studying the ecosystem and, as a result, had created a “conceptual framework” focusing on companies and other activities, they are carried out with cryptocurrencies.

In that statement, the BCU stated that although â ????these instruments may have the potential to contribute to the development and efficiency of the financial and payment system, but they can also “create new risks or exacerbate existing ones”, allegedly due to the – ???? Lack of specific regulation to mitigate themâ ????.

Primarily, the BCU indicated that digital assets –they are not legal tender coins? in Uruguay because “they were not issued or have the support of a central bank”. This makes it clear that the Uruguayan peso is the only one in this country that has this name. In this sense, The central office made it clear that Uruguayan financial institutions and companies are not obliged to process transactions with cryptocurrencies and other virtual assets or to accept them as a means of payment.

Some recommendations

However, the Central Bank of Uruguay recommended that users conduct an assessment that will analyze the risks associated with operating this type of asset. This suggests that high returns are generally associated with high risk.

All of these actions that banks are taking are expected to be in line with BCU’s policy to provide more information and recommendations.to those currently working with virtual assets, as well as to all users of the financial system.

The subject of regulation is not new in Uruguay. In August it was announced that a bill to regulate Bitcoin (BTC) and the other cryptocurrencies stipulated that the state would issue up to four types of licenses for this industry.

Regional interest in cryptocurrencies

The announcement by the Central Bank of Uruguay comes at a time when the region is taking digital currencies much more seriously to streamline regulatory processes to effectively accommodate the commercial and operational considerations of these assets.

For analysts and enthusiasts, interest came after the actions sponsored by the El Salvador government that made Bitcoin an official currency from September 7th.

As part of the above statement, the Central Bank of Uruguay now also reached out to cryptocurrency enthusiasts, reminding them that digital assets are not legal tender in the country’s jurisdiction. The BCU also made it clear that activities related to cryptocurrencies are not regulated by any body in the country. As a result, the protections that apply to ordinary investors do not apply to citizens involved in trading or investing in cryptocurrencies.

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