Central Bank of Uruguay Describes Roadmap to Crypto Asset Regulation

The Central Bank of Uruguay has issued a statement describing a roadmap for the regulation of cryptocurrency assets in the near future. The institution stated it has established a group to examine the best way possible to regulate these assets, considering the realities of the crypto industry. Also, some modifications to current laws could be made to prepare for the upcoming regulation towards the end of the year.

Central Bank of Uruguay Hints at Crypto Regulation

The Central Bank of Uruguay has issued a statement about virtual assets where it roughly describes the roadmap the institution will follow in the process of regulating cryptocurrencies. The bank has already created a study group to examine how the crypto world functions, and taking this into account, it created a conceptual idea of how this market could soon be regulated.

The institution also announced that during Q4 2021 it will be involved in talks with industry actors in the country with the objective of perfecting the knowledge about how these companies work. The statement stresses:

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

With an already clear view of the cryptocurrency business, the Central Bank of Uruguay will propose modifications to the current laws before the end of this year, to better accommodate the establishment of new crypto-focused regulations in the future.

Recommendations and Advice on Cryptocurrency

The bank also proposed some recommendations for users of cryptocurrencies, stating that these assets are not considered legal tender in the country like the Uruguayan peso, which is recognized and backed by the institution. This distinction in view, the establishment of a regulatory framework for crypto could be very different than the one approved in El Salvador, where bitcoin was declared legal tender.

The central bank clarified that cryptocurrency-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.

The bank advises people interested in crypto assets to:

Carry out an exhaustive assessment of the risks assumed when operating with these instruments and take the necessary precautions to mitigate them, taking into account that high returns are generally associated with high risks.