On September 10, 2024, Parliament approved the bill for the regulation of virtual assets (the Law), which modifies the current regulations to formally recognize virtual assets, equating them regulatoryly to book-entry securities, and includes Virtual Asset Service Providers (PSAV) within the regulatory and supervisory scope of the Central Bank of Uruguay (BCU).
Below we highlight the most relevant points:
- A new species is added within the genre of scriptural values
The Law modifies article 14 of the Securities Market Law No. 18,627, with the purpose of including virtual assets within the definition of book-entry securities. As of this modification, book-entry securities will be divided into two categories:
- centralized registration (which maintain the current regulations in their entirety); and
- decentralized ledger, a new category that encompasses virtual assets, which are characterized by the absence of a centralized registering entity, since they are issued, stored, transferred and negotiated electronically through distributed ledger technologies.
With the addition of this new class, the rules applicable to book-entry securities will be extended to virtual assets, to the extent that they are compatible with the nature of the latter’s non-centralized registry.
- PSAVs are included within the regulatory and supervisory scope of the BCU
The Law modifies articles 37 and 38 of the Organic Charter of the BCU (Law No. 16,696), with the aim of placing the PSAVs that operate with virtual assets of a financial nature under the control of the Superintendency of Financial Services (SSF).
In addition, the BCU will regulate and supervise the activity of entities that provide virtual asset purchase and sale services, in accordance with the definition it adopts for such purposes.
PSAVs must request authorization from the BCU to operate, which will grant or deny it based on criteria of legality, opportunity and convenience, and may revoke it in the event of serious violations, in addition to establishing the rules for their operation.
- PSAVs are regulated in terms of money laundering and terrorist financing control
The Law also seeks to make the PSAVs subject to the regulatory and supervisory powers of the BCU in the area of money laundering and terrorist financing control for the activities they carry out. This is because the entities included in the second paragraph of article 37 of the Organic Charter of the BCU are also, by legal provision, subject to this type of control.
For more information contact:
Carla Arellano | Ferrere Advisor | carellano@ferrere.com
