Uruguay Proposes to Bring Digital Assets Under Central Bank Control With New Crypto Bill

A bill granting the Central Bank of Uruguay (BCU) the authority to control virtual assets was submitted to the country’s parliament.

Apart from changing the legal powers of the BCU, the Financial Services Superintendence (SSF) is placed to oversee a new category of virtual asset service providers, per the local reports.

Among other things, the bill proposes changes to the BCU’s charter. In addition, issuers of virtual assets have also been defined as “the entities that regularly and professionally provide one or more services of virtual assets to third parties” and have been placed under SSF’s supervision.

“With the proposed amendments, both the previously regulated subjects and the new incorporated entities that operate with virtual assets will be subject to the supervisory and control powers of the Central Bank of Uruguay,” the bill notes.

With the introduction of the bill, both domestic and international entities that operate in Uruguay will come under the country’s anti-money laundering standards and the rules placed for combating the financing of terrorism.

Articles for determining the value and ownership of virtual assets along with the proposed categorization of crypto assets as “book-entry securities” bring new regulations to the sector.

Uruguay regulators come forward to tighten rules

In recent weeks, the BCU caught Binance’s attention for spreading advertising to “buy cryptocurrencies under an investment with savings features.”

In the statement, the Superintendence of Financial Services stated that “the call to the public for the application of their savings, can only be done in the authorized form for collection through financial intermediation institutions authorized to collect deposits in the market, or as an issuer registered in the stock market register.”

Meanwhile, South America is seeing increased crypto interest despite the fickle market. Recently, BTG Pactual, Latin America’s largest investment bank, launched a crypto trading platform called Mynt.

BTG Pactual joined competitor XP and Nubank to foray into the crypto sector. Before that, Santander Brasil announced the launch of a crypto trading service for both institutional and retail customers. In fact, Meta has also applied for trademark registration in Brazil for crypto-related services.

Meanwhile, according to reports, the Brazilian Securities and Exchange Commission is also working to reform the nation’s legislative system to better regulate cryptocurrencies.

How effective will the new regulations be?

The IMF noted in its recent blog post that the longer it takes for the crypto rules to kick in, “the more national authorities will get locked into differing regulatory frameworks.”

Kenya’s Equity Group Holdings Plc CEO, James Mwangi, has suggested in the past that crypto could become part of the mobile money ecosystem.

Sasha Ivanov, founder, and CEO of the Waves smart contract blockchain said in an interview with Be[In]Crypto that the crypto industry needs regulation to deal with issues of market manipulation and to protect users against bad actors.

However, possibly due to the decentralized nature of the technology and varying use cases within the ecosystem, regulators are taking longer than usual to come to terms with the asset class.