Uruguay Cryptocurrency regulation

As cryptocurrency becomes more popular throughout the world, countries are trying to regulate crypto assets under the regulatory framework of financial institutions.

Uruguayan parliament has chosen such a way, by starting to implement cryptocurrency within their financial system.


One of the Uruguayan lawmakers – Juan Sartori proposed a new bill to legalize crypto-assets and give them a legal tender status. Considering this legislative proposal, it is possible to have some insight on how the Uruguayan authorities plan to define and determine the legal characteristics of crypto assets and blockchain technologies. Additionally, the Central Bank of Uruguay (Banco Central del Uruguay – hereinafter: – BCU) announced the initiation of a “work plan” or “roadmap”, with a view to laying the foundations for the regulatory treatment of virtual assets and the activities of virtual asset service providers in the jurisdiction. Having analyzed the contemporary situation around using cryptocurrency, BCU proclaimed a list of risks in the cryptosphere. Main issues that must be resolved are following:

  • measures to combat the application of cryptocurrency in money laundering;
  • taxation of cryptocurrency transactions;
  • impossibility to guarantee rights of crypto investors, as cryptocurrency is not backed by BCU or any other central bank around the world.

Uruguay has all chances to grow into the “crypto-hub” of the South American cryptomarket, based on the following factors:

  • Uruguay has a positive approach on cryptocurrency regulation and it is the country which has strong intention to adopt cryptocurrency as a legal tender;
  • The country has a high level of intolerance to corruption (according to the Transparency International index), which positively influences a market climate, and investor trust.


BCU defines a “virtual asset” as the digital representation of value or contractual rights that can be stored, transferred and negotiated electronically through distributed ledger technologies (DLT) or similar.

Moreover, the abovementioned bill by Sartori gives us a general understanding to determine main definitions related to digital assets. However, the bill has not yet been officially accepted by parliament yet but it can provide guidance on how the Uruguayan authorities plan to regulate them.

According to the bill virtual assets or crypto assets (Activo Virtual o Criptoactivo) are considered as “representation of registered value electronically used among the public as a means of payment for all kinds of legal acts and whose transfer can only be carried out through electronic means. A virtual asset is a digital product that uses cryptographic encryption to guarantee its ownership and ensure the integrity of transactions. These products do not exist in physical form. For storing them you use a digital wallet. To carry out transactions, software is used that records said transaction on a blockchain. These Virtual Assets are produced from a process known as Virtual Asset Mining. Token on the other hand, is described as a cryptographic token that represents a unit of value within a chain of blocks (blockchain), and that can be acquired to obtain goods and services.

Moreover, the bill categorizes the different types of tokens as following:

  • utility token: These tokens represent a right or property towards a future product or service, they are generally used to get financing for a project.
  • Token identity: Representation of certain information that the user saves, a right and his identity.
  • Security Token: These tokens represent a digital financial asset representation of shares that are listed, and therefore are governed by the Securities Market Law. It implies an investment on the Blockchain network.

Despite the bill has not been adopted by parliament yet, this analysis is necessary to be better prepared for future legislative incentives and to effectively plan movement of capital.


Recently Uruguay updated his anti-money laundering system by adopting Law No.19574 against money laundering. This law divided overseeing and supervising obligations of financial and non-financial spheres between two bodies: BCU and National Anti-Money Laundering and Terrorism finanсing organizations (hereinafter: – Senaclaft). The most concerning problem of their work is the right of BCU (after Senaclaft request) to block or cancel any transaction carried out in the country if it is deemed to be suspicious.. Current situation with virtual assets, carried out within and outside of Uruguay grants the right to authorities to determine any transaction as strange or enormous, because virtual assets are not monitored within Uruguayan regulatory framework. So, if a legal entity or private person decided to exchange cryptocurrency for fiat currency, there is a chance that Senaclaft and BCU would cancel such a transaction and then would question the reason for the transaction and origin of money.

Article 9 of the bill determines Senaclaft rights within the realm of regulating virtual assets, correspondingly, Senaclaft might have a right to:

  • maintain a Registry of Virtual Asset Service Providers as established in this law including those natural or legal persons who wish to carry out activities of generation and commercialization of virtual assets;
  • regulate, control and audit those who register as Virtual Asset Providers in accordance with the requirements established in their own regulation;
  • monitor of the national Virtual Assets market, paying attention to the better way to determine weaknesses in supervision of the barter of these Virtual Assets.

As noted above, Senaclaft does not yet have exclusive rights to serve as a watch-dog of the virtual assets industry. However, the situation might change thanks to potential regulatory updates., but Senaclaft competence will be widened on the sphere of virtual assets. Consequently, parliament considers virtual assets as a non-financial sector of the economy, in correspondence with AML provisions.


In terms of taxation, there is no information from Uruguayan authorities on their intentions to determine cryptocurrency for the purposes of taxation. Now, there are two main taxes for residents and non-residents: Income tax on resident individuals (hereianfter:- “IRPF”) and Income tax on non-residents individuals (hereinafter:- “IRNR”).

  • IRPF has a progressive tax rate according to annual income (from 0% to 36%);
  • IRNR has the rate from 7% to 25%. If the non-resident of Uruguay was set up or domiciled in the low tax or zero-tax rate jurisdictions, there is a fixed IRNR rate, which is 25%.


In summary, Uruguay is the country which has all chances to become a very attractive place in respect of cryptocurrency investments and relevant transactions. However, to date, Uruguay has not yet adopted any specific legislation to establish a regulatory foundation and there is little chance of consumer protection in the jurisdiction. However, it is worth staying optimistic about the prospective laws which are promised to make digital assets a legal tender in the country.

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