New Draft Law in Uruguay Could Legalize Crypto as Payment Method

A new draft law introduced to the Senate in Uruguay could regulate cryptocurrency transactions, and also legalize cryptocurrency as an accepted payment method in the country. If approved, the draft proposed by Senator Juan Sartori would also introduce licenses for Virtual Asset Service Providers (VASPs) that would be issued by the government, classifying them into three different groups.

Draft Law in Uruguay Seeks to Legalize Crypto Payments

A new draft law introduced to the senate of Uruguay on August 3 proposes the legalization of cryptocurrencies as a valid means of payment for goods and services in the country.

Proposed by Uruguayan senator Juan Sartori, the draft law establishes permits and licenses for institutions and Virtual Asset Service Providers, and puts cryptocurrency business under the oversight of Senaclaft, the national money-laundering watchdog.

In its fifth article, the “Cryptoasset Law” (as it has been called) announces the legality of cryptocurrency for payments, but the proposal falls short of declaring Bitcoin or other cryptocurrencies as legal tender like El Salvador did on June 9. The article states cryptocurrencies will be:

…recognized and accepted by the Law and applicable in any legal business. They will be considered a valid means of payment, in addition to those included in the Financial Inclusion Law, provided that they comply with the norms that the Law and the regulatory norm provide.

VASPs Will Have to Get Licenses

Another interesting part of the draft is a system of licenses for VASPS, that foresees three types of permits for these institutions. One type of license will be issued exclusively to cryptocurrency exchanges. The second type of license will regulate cryptocurrency custody providers, and the third one will deal with crypto assets or utility tokens with financial characteristics.

While mining companies will not require a special license to operate, they will however have to obtain a permit issued by the Industries Ministry of the country. Mining would also be considered an industrial activity within the Industrial Registry of the Ministry of Industry and Commerce, to promote standards and rules on that ecosystem.

If approved, Senaclaft would be responsible for maintaining a level of vigilance over cryptocurrency exchanges. The institution will maintain a list of VASPs, who will have to comply with AML and KYC regulations already in effect. The institution will have to audit and regulate the activities of such companies.