Central Bank of Uruguay to establish crypto regulation

Wed 06 Oct 2021 ▪ 14h04 ▪ 3 min de lecture - par Katie Donaldson

The Central Bank of Uruguay (BCU) has released a plan of action to establish a clear framework the institution will follow in the process of regulating cryptocurrency assets. The bank has already created an internal working group that will examine all crypto-related instruments, as well as operations with digital assets.

Laying the foundation

According to the BCU’s official statement, the regulator plans to revise the current digital currencies legal provisions and analyse the use of blockchain and its implications in the stock market. This will be done in order to improve payment systems efficiency.

The bank has also stressed the importance of establishing a relationship with all crypto actors. 

“In the last quarter of the year, a dialogue will be promoted with industry players and relations with other regulators and international organisations. These exchanges will contribute to perfecting the conceptual framework with a view to achieving a regulatory approach that contributes to the aforementioned purposes,” the entity confirmed in the statement.

The proposal is supposed to be finalised by the end of the year.

The working group has already achieved positive results, including developing a “conceptual framework based on the business reality of the different operations involving virtual assets, including both new activities and those that may already be covered by current regulations.”

Currently, the issuance and trading of digital assets aren’t included as a part of the BCU’s activities, and therefore they are not subject to any specific regulation.

The bank advised users of cryptocurrencies to carry out an extensive research of any crypto-related issues, as well as take all precautions necessary to prevent losses since high returns are generally associated with high risks. The entity also mentioned that Bitcoin (BTC) and other digital currencies are not considered legal tender in the country like the Uruguayan peso, which is recognised and backed by the institution. 

The central bank clarified that crypto-related activities were not regulated by any institutions in the country. As a consequence, none of the protections that apply to regular investors could protect citizens involved in cryptocurrency trade or investments.

In August, Uruguay introduced a formal bill aimed to fill gaps in crypto legislation, prevent crimes related to digital assets, as well as to regulate the issuance, holding and trading of crypto assets. However, said bill didn’t alter the country’s existing legal or administrative framework. 

The Central Bank of Uruguay is aiming to change the process of regulating Bitcoin and other digital currencies. The entity has proposed a roadmap for the improval of crypto regulation.

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Katie Donaldson

I went full time crypto back in June 2018, and have never looked back. I want to help persuade as many people as possible to come and build the decentralised future! Let’s go!

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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