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Uruguay

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#84
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Archived
Created
2025-04-12 06:44
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Live

Executive Summary

Retail cryptocurrency trading is legally allowed and regulated in Uruguay since late 2024, following the enactment of Law No. 20.345. The Banco Central del Uruguay (BCU) is the primary regulator, overseeing Virtual Asset Service Providers (VASPs) who must obtain licenses and comply with AML/KYC regulations. Cryptocurrencies are recognized as virtual assets, but not legal tender. The regulatory framework aims to provide consumer protection and market integrity.

Key Pillars

The primary regulator is the Banco Central del Uruguay (BCU), which oversees and regulates Virtual Asset Service Providers (VASPs). Core compliance requirements include adherence to AML/CFT regulations (Law No. 19.574), Customer Due Diligence (CDD), and Know Your Customer (KYC) procedures. VASPs must obtain authorization or a license from the BCU before commencing operations.

Landmark Laws

Law No. 20.345, published around September/October 2024, is Uruguay's first dedicated legislative effort to address virtual assets expressly, recognizing cryptocurrencies as 'virtual assets' and bringing activities related to them under a regulatory umbrella. Law No. 19.574 governs Uruguay's existing Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework.

Considerations

Cryptocurrencies are classified as 'incorporeal movable goods,' meaning they have monetary value but are not legal tender. There is no law prohibiting their use as a means of payment where accepted. The 2024 law integrates VASPs into Uruguay's existing Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework, requiring Customer Due Diligence (CDD) and Know Your Customer (KYC) procedures. The BCU is expected to issue detailed secondary regulations to flesh out the specific requirements for VASP licensing, operational standards, risk management, and the precise application of AML/CFT rules within the virtual asset context.

Notes

Prior to Law No. 20.345, Uruguay operated in a regulatory gray area regarding virtual assets. The BCU is expected to issue detailed secondary regulations during the first half of 2025 to specify VASP licensing, operational standards, and AML/CFT rules. According to Thomson Reuters in April 2022, the central bank clarified that crypto assets are not considered legal tender. Binance reported on October 2, 2024, that the new law amends existing anti-money laundering and counter-terrorism financing regulations to include virtual assets under the control and supervision of current enforcement agencies.

Detailed Explanation

Retail cryptocurrency trading is permitted and regulated in Uruguay. Prior to late 2024, the environment was considered crypto-friendly but lacked specific laws, creating uncertainty, especially for service providers. Law No. 20.345, enacted around September/October 2024, provided the first dedicated legislation for virtual assets, defining cryptocurrencies as 'virtual assets' and bringing related activities under regulation. The Banco Central del Uruguay (BCU) is designated as the primary regulator, empowered to oversee Virtual Asset Service Providers (VASPs), defined as 'financial' by BCU regulations. VASPs, including exchanges and wallet providers, must obtain BCU authorization or a license from the Superintendence of Financial Services (SSF), operating under the BCU. The aim is consumer protection, market integrity, and risk mitigation regarding financial stability and illicit activities. Cryptocurrencies are not legal tender but 'incorporeal movable goods,' usable for payments where accepted. The 2024 law integrates VASPs into Uruguay's AML/CFT framework (Law No. 19.574), requiring CDD/KYC procedures, beneficial owner identification, risk-based monitoring, and suspicious transaction reporting to the Financial Information and Analysis Unit (UIAF) within the BCU. Law No. 20.345 is foundational, requiring detailed secondary BCU regulations for VASP licensing, operational standards, risk management, and AML/CFT application, expected in the first half of 2025. The law equates cryptoassets with book-entry securities, as noted by Blockchain Summit Latam on September 29, 2024. Bergstein Abogados noted that to commence activities in Uruguay, VASPs must obtain prior authorization from the BCU and that the BCU is expected to issue extensive regulations during the first semester of 2025.

Summary Points

Here's a bullet-point summary of the Retail Cryptocurrency Trading Status in Uruguay, based on the provided report:

I. Overall Regulatory Status

  • Status: Allowed-Regulated
  • Retail cryptocurrency trading (buying, selling, holding by individuals) is legally permitted.
  • Activity is now subject to a specific regulatory framework established in late 2024.
  • Prior to the new law, Uruguay was considered crypto-friendly but operated in a regulatory gray area.

II. Key Regulatory Bodies

  • Central Bank of Uruguay (Banco Central del Uruguay - BCU):
    • Primary regulator for the virtual asset sector.
    • Oversees and regulates Virtual Asset Service Providers (VASPs).
    • Responsible for issuing detailed secondary regulations.
  • Superintendence of Financial Services (Superintendencia de Servicios Financieros - SSF):
    • Operates under the BCU.
    • Directly supervises licensed VASPs.
  • Financial Information and Analysis Unit (UIAF):
    • Located within the BCU.
    • Receives suspicious transaction reports from VASPs.

III. Important Legislation and Regulations

  • Law No. 20.345 (Enacted Late 2024):
    • Uruguay's first dedicated legislation addressing virtual assets.
    • Formally recognizes cryptocurrencies as "virtual assets."
    • Brings activities related to virtual assets under a regulatory umbrella.
    • Equates cryptoassets with book-entry securities.
  • Law No. 19.574 (and previous related laws):
    • Uruguay's existing Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework.
    • VASPs are now explicitly subject to this framework.
  • BCU Regulations (Expected First Half of 2025):
    • Detailed secondary regulations to flesh out specific requirements for VASPs.
    • Covers licensing, operational standards, risk management, and AML/CFT application.

IV. Requirements for Compliance (VASPs)

  • Licensing/Authorization:
    • VASPs must obtain authorization or a license from the BCU before commencing operations.
  • AML/CFT Obligations:
    • Implement robust Customer Due Diligence (CDD) and Know Your Customer (KYC) procedures.
    • Identify ultimate beneficial owners.
    • Establish risk-based monitoring programs.
    • Report suspicious transactions to the UIAF.
  • Operational Standards & Risk Management:
    • Adhere to operational standards and risk management requirements as defined by the BCU's secondary regulations (expected in the first half of 2025).

V. Notable Restrictions or Limitations

  • Not Legal Tender:
    • Cryptocurrencies are not considered legal tender in Uruguay.
    • Defined by the BCU as "incorporeal movable goods."
  • VASP Restrictions:
    • VASPs must be licensed and comply with AML/CFT regulations.

VI. Recent Developments or Changes

  • Enactment of Law No. 20.345 (Late 2024):
    • Established a specific regulatory framework for virtual assets.
    • Designated the BCU as the primary regulator.
  • Integration of VASPs into AML/CFT Framework (Late 2024):
    • VASPs are now subject to AML/CFT obligations.
  • Pending BCU Regulations (Expected First Half of 2025):
    • Detailed secondary regulations are expected to be issued by the BCU.

Full Analysis Report

Report: Retail Cryptocurrency Trading Status in Uruguay

Date: April 12, 2025

Analyst: Specialized Financial Regulatory Analyst AI

Topic: Retail_Trading_Status

Description: Assessment of the legal permissibility for individual citizens and residents in Uruguay to buy, sell, and hold cryptocurrencies, including details on the surrounding regulatory environment (e.g., KYC/AML requirements, official warnings).

1. Current Status: Allowed-Regulated

2. Detailed Narrative Explanation:

Retail cryptocurrency trading (buying, selling, holding by individuals) is legally permitted in Uruguay and is now subject to a specific regulatory framework established in late 2024. Prior to this, Uruguay was generally considered crypto-friendly but operated in a regulatory gray area without specific legislation governing virtual assets. While individuals could trade, the lack of clear rules created uncertainty, particularly for service providers.

The key development was the enactment of Law No. 20.345, published around September/October 2024. This law represents Uruguay's first dedicated legislative effort to address virtual assets expressly. It formally recognizes cryptocurrencies as "virtual assets" and brings activities related to them under a regulatory umbrella.

The Central Bank of Uruguay (Banco Central del Uruguay - BCU) has been designated as the primary regulator for the sector. The law empowers the BCU to oversee and regulate Virtual Asset Service Providers (VASPs). While the law itself doesn't define VASPs exhaustively, it incorporates them into the scope of entities supervised by the BCU, specifically those defined as "financial" by the BCU's subsequent regulations. This includes entities like cryptocurrency exchanges, wallet providers, and potentially miners involved in certain activities.

Under this new framework, VASPs must obtain authorization or a license from the BCU before commencing operations in Uruguay. The Superintendence of Financial Services (Superintendencia de Servicios Financieros - SSF), operating under the BCU, is tasked with the direct supervision of these licensed entities. The goal is to ensure consumer protection, market integrity, and mitigate risks related to financial stability and illicit activities.

Importantly, cryptocurrencies are not considered legal tender in Uruguay. They are defined by the BCU as "incorporeal movable goods," meaning they have monetary value but are not official currency. However, there is no law prohibiting their use as a means of payment where accepted or their exchange for goods and services.

The 2024 law also integrates VASPs into Uruguay's existing Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework (primarily governed by Law No. 19.574 and previous related laws). VASPs are now explicitly subject to AML/CFT obligations, which include implementing robust Customer Due Diligence (CDD) and Know Your Customer (KYC) procedures, identifying ultimate beneficial owners, establishing risk-based monitoring programs, and reporting suspicious transactions to the Financial Information and Analysis Unit (UIAF) within the BCU.

While Law No. 20.345 establishes the foundational regulatory structure, it is relatively concise. The BCU is expected to issue detailed secondary regulations to flesh out the specific requirements for VASP licensing, operational standards, risk management, and the precise application of AML/CFT rules within the virtual asset context. These detailed regulations were anticipated to be developed during the first half of 2025.

In summary, individual Uruguayans are legally allowed to engage in cryptocurrency trading. This activity is now formally regulated, with the BCU overseeing licensed service providers who must adhere to specific operational and AML/KYC requirements.

3. Specific Relevant Text Excerpts:

  • On the New Law and BCU's Role (2024): "Uruguay aprobó la Ley N° 20.345 para regular activos digitales y posicionarse en el ámbito fintech... Equipara los criptoactivos con los valores escriturales, lo que significa que ahora están bajo el paraguas regulatorio del Banco Central del Uruguay (BCU)." (Translation: "Uruguay approved Law No. 20.345 to regulate digital assets and position itself in the fintech field... It equates cryptoassets with book-entry securities, meaning they are now under the regulatory umbrella of the Central Bank of Uruguay (BCU).")
    • Source: Blockchain Summit Latam (September 29, 2024)
  • On VASP Licensing (2024): "This new legislation fully legalizes cryptocurrency exchanges, requiring them and other crypto platforms to obtain licenses. The Central Bank of Uruguay will oversee and regulate the process."
    • Source: Why Is Everyone Going There? (January 27, 2025 - referencing the Oct 2024 law)
  • On VASP Authorization (2024): "Para comenzar actividades en Uruguay, las VASP deberán recabar la previa autorización del BCU." (Translation: "To commence activities in Uruguay, VASPs must obtain prior authorization from the BCU.")
    • Source: Bergstein Abogados (Undated, referencing the Sept 2024 law publication)
  • On Individual Trading Permission (Pre-2024 Law, but still applicable): "Cryptocurrencies are recognized as “virtual assets,” and there is no law in place prohibiting the exchange of cryptocurrency for services or operations. Cryptocurrencies can thus be used as payment in establishments which accept them as a form of payment..."
    • Source: Latin America Reports (November 12, 2024 - referencing the state even before full implementation)
  • On Crypto Not Being Legal Tender (2022): "The central bank clarified that the assets are not considered legal tender..."
    • Source: Thomson Reuters (April 4, 2022 - reflecting BCU's consistent stance)
  • On Pending Detailed Regulation (2024): "Como se puede ver, la Ley es escueta y requerirá de una amplia regulación por parte del BCU. Este ya ha informado que estima emitir esa reglamentación en el curso del primer semestre del 2025." (Translation: "As can be seen, the Law is brief and will require extensive regulation by the BCU. The latter has already informed that it expects to issue this regulation during the first half of 2025.")
    • Source: Bergstein Abogados (Undated, referencing the Sept 2024 law publication)
  • On AML/CFT Integration (2024): "The new law also amends existing anti-money laundering and counter-terrorism financing regulations to include virtual assets under the control and supervision of current enforcement agencies."
    • Source: Binance (October 2, 2024)
  • On General AML Requirements (Applicable to VASPs): "Essential AML obligations in Uruguay encompass: Customer identification... Risk-based AML programs... Customer Due Diligence (CDD)... Ongoing monitoring... Reporting suspicious activities..."
    • Source: Sanction Scanner (October 4, 2023 - outlining general framework now applicable to VASPs)

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