Earlier this month, the Central Bank of Uruguay released a statement on its present stand regarding virtual assets. To begin, the bank admitted that there are no clear regulations concerning virtual assets in Uruguay.
However, the Central Bank noted that these emerging virtual assets must operate within the bounds of regulations in order to avoid the excesses that they may breed. On this note, the bank gave tentative directives regarding virtual assets in the country.
By virtual asset, the bank meant “a digital representation of value or contractual rights that can be electronically stored, transferred and traded using distributed ledger technologies (DLT) or similar.”
According to the statement, virtual assets are not legal tenders in the Uruguayan financial ecosystem because they are not issued by the Central Bank. In other words, the decentralized nature of virtual assets disenfranchises them from being legal tenders in Uruguay.
Due to this decentralized mode of operation, the Central Bank of Uruguay said in the statement that residents who engage in virtual assets have no power to seek redress in case of any problem or fraudulent activities as not recognized as assets by the Central Bank.
Furthermore, the anonymity of blockchain technology grants virtual assets maximum confidentiality. With regards to this, the Central Bank expressed its fear that money launders may use virtual assets to perpetuate their activities in Uruguay.
That aside, the Central Bank of Uruguay noted that it plans to prepare a clear regulatory framework that would define the terms and activities of virtual assets in the country. This is necessary to settle the position of the law in this regard and provide the roadmap.