BlockCHAIN[reg] LATAM

 

Why Latin America is a big opportunity for blockchain and Web3:

  1. People need alternatives – In countries like Argentina and Venezuela, inflation and weak currencies push people to use crypto (especially stablecoins) to protect their money.

  2. Remittances are huge – Countries like Mexico get billions in remittances (around $61B/year), and crypto makes sending money cheaper and faster.

  3. Big players are paying attention – In Brazil, there’s been a big jump (48.4%) in large crypto transactions, showing that banks and institutions are getting involved too.

Bottom line: Latin America mixes everyday use by regular people with growing interest from big financial institutions—a perfect combo for blockchain and Web3 to thrive.

  • Crypto is legal and treated as “goods” but banks are barred from offering crypto services. Tax applies, and exchanges must comply with AML/KYC.

    Legal Status of Cryptocurrencies in Argentina

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Argentina. According to Section 765 of the Argentine Civil and Commercial Code, only the Central Bank of Argentina is authorized to issue legal currency.​

    • Permissible Use: Despite not being legal tender, the use, trading, and holding of cryptocurrencies are permitted. Contracts can be settled in crypto, and individuals and businesses are allowed to buy, sell, and offer crypto services .​

    🧾 Key Legislation and Regulatory Framework

    1. Law No. 27,739 (Enacted March 15, 2024)

    This law marked a significant shift in Argentina's approach to crypto regulation by introducing a comprehensive framework for Virtual Asset Service Providers (VASPs).​

    • Definition of VASPs: Entities or individuals engaged in activities such as exchanging virtual assets for fiat currencies or other virtual assets, transferring virtual assets, providing custody or administration of virtual assets, and offering financial services related to virtual assets .​

    • Mandatory Registration: All VASPs operating in Argentina or targeting Argentine residents must register with the Comisión Nacional de Valores (CNV), Argentina's securities regulator .​

    • Anti-Money Laundering (AML) Compliance: VASPs are required to implement AML and Counter-Terrorist Financing (CFT) measures, aligning with international standards set by the Financial Action Task Force (FATF).

    2. CNV General Resolution No. 994/2024

    Issued on March 22, 2024, this resolution established the mandatory registry for VASPs and outlined the conditions for registration, including:​

    • Use of a ".ar" domain.​

    • Commercial agreements facilitating the receipt of funds from Argentine residents.​

    • Advertising or targeting Argentine residents.​

    • Generating more than 20% of total turnover in Argentina from activities requiring VASP registration.​

    3. UIF Resolution No. 49/2024

    This resolution, issued by the Financial Intelligence Unit (UIF), designates VASPs as reporting entities under AML laws. It mandates:​

    • Implementation of Know Your Customer (KYC) procedures.​

    • Transaction monitoring and reporting of suspicious activities.​

    • Development of internal policies and manuals for AML compliance.

    📅 Compliance Deadlines

    To facilitate a phased introduction to compliance, the following deadlines have been established:​

    • Individuals: Before July 1, 2025.​

    • Legal entities incorporated in Argentina: Before August 1, 2025.​

    • Legal entities incorporated abroad: Before September 1, 2025.​

    • Legal entities incorporated abroad establishing a company in Argentina: Before September 1, 2025.​

    The full regulatory framework will take effect on December 31, 2025.​

    🔍 Enhanced Regulatory Measures

    CNV General Resolution No. 1058/2025

    Published on March 13, 2025, this resolution finalizes the regulatory framework for VASPs, introducing:​

    • Operational Requirements: Mandatory separation of company and client funds, annual audits, monthly reporting, and cybersecurity protocols.​

    • Licensing and Oversight: Transforms the VASP registry into a full-fledged licensing and oversight regime, with the CNV assuming supervisory authority over VASPs.​

    💰 Taxation and Asset Regularization

    • Taxation: Profits derived from the sale of digital currency are considered income and subject to taxation under the 2017 amendments to the Income Tax Law.​

    • Asset Regularization ("Blanqueo"): Law No. 27,743 introduces an asset regularization program allowing individuals to declare previously undeclared assets, including cryptocurrencies, by paying a tax. The final deadline for submitting a sworn declaration is May 30, 2025.​

    ⚠️ Enforcement and Penalties

    Non-compliance with the established regulations can lead to severe penalties, including:​

    • Warnings and fines.​

    • Disqualification from operating in the country for up to five years.​

    • Revocation of registration and potential legal action.​

    Argentina's evolving regulatory landscape reflects its commitment to integrating cryptocurrencies into its financial system while safeguarding against illicit activities. Entities and individuals involved in crypto-related activities should ensure compliance with the current laws and prepare for the upcoming regulatory requirements.​

  • A clear framework under Law No. 14,478 (2022). The Central Bank oversees operations, and taxation/reporting requirements are in place for exchanges.

    Legal Status of Cryptocurrencies in Brazil

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Brazil. The Brazilian Real (BRL) remains the sole official currency.​

    • Permissible Use: Despite not being legal tender, cryptocurrencies can be used as a means of payment and for investment purposes. Law No. 14,478/2022, known as the "Legal Framework for Virtual Assets," provides legal recognition and outlines the regulatory environment for virtual assets in Brazil.​

    🧾 Key Legislation and Regulatory Framework

    1. Law No. 14,478/2022 – Legal Framework for Virtual Assets

    Enacted on December 21, 2022, and effective from June 20, 2023, this law establishes guidelines for the provision of virtual asset services and the regulation of VASPs. Key provisions include:​

    • Definition of Virtual Assets: Digital representations of value that can be traded or transferred electronically and used for payments or investments, excluding national and foreign currencies, electronic currencies, loyalty program points, and securities. ​

    • Definition of VASPs: Legal entities that perform, on behalf of third parties, at least one of the following services:

      • Exchange between virtual assets and national or foreign currency.

      • Exchange between one or more virtual assets.

      • Transfer of virtual assets.

      • Custody or administration of virtual assets or instruments that allow control over virtual assets.

      • Participation in financial services and provision of services related to an issuer's offer or sale of virtual assets.​

    • Regulatory Authority: The Central Bank of Brazil (Banco Central do Brasil - BCB) is designated as the competent authority to regulate, authorize, and supervise VASPs, pursuant to Decree No. 11,563 of June 13, 2023. ​

    • Consumer Protection: The law applies the provisions of the Consumer Protection Code (Law No. 8,078/1990) to operations conducted in the virtual assets market, ensuring consumer rights are upheld.​

    • AML and CFT Measures: VASPs are included in the list of entities subject to the control and supervision mechanisms of the Council of Financial Activities Control (COAF), as per amendments to Law No. 9,613/1998.

    • Criminal Provisions: The law introduces penalties for fraud involving virtual assets, with imprisonment ranging from four to eight years and fines. It also increases penalties for money laundering offenses committed through the use of virtual assets.

    2. Decree No. 11,563/2023

    Issued on June 13, 2023, this decree designates the BCB as the regulatory authority for VASPs and outlines the coordination between various regulatory bodies, including the Securities and Exchange Commission of Brazil (CVM) and the Federal Revenue Service (RFB).

    📅 Regulatory Developments and Compliance Deadlines

    • Public Consultations: The BCB initiated public consultations to gather input on the regulation of VASPs. The first round concluded on January 31, 2024, focusing on governance aspects, AML measures, risk management, and blockchain custody monitoring. A second round is planned for the second half of 2024. ​

    • Implementation Timeline: The BCB aims to finalize and implement comprehensive regulations for VASPs by early 2025, following the conclusion of public consultations and the drafting of regulatory texts.

    • Compliance Period: Once the regulations are published, VASPs will be granted a minimum of six months to comply with the new requirements, as stipulated by Law No. 14,478/2022.

    💰 Taxation and Reporting Obligations

    • Domestic Taxation: The Brazilian Federal Revenue Service (RFB) mandates that any legal entity offering services related to operations with cryptoassets, including intermediation, negotiation, or custody, must report transactions involving cryptoassets. This is governed by Normative Instruction RFB No. 1,888/2019.

    • Foreign Crypto Assets: Law No. 14,754, enacted in November 2023, introduces a 15% income tax on earnings from crypto assets held abroad by Brazilian residents, effective January 1, 2024. This law distinguishes between national and foreign taxation regimes for crypto assets.

    • Enforcement Actions: In June 2024, the RFB announced plans to summon foreign crypto exchanges operating in Brazil to provide information about their operations and compliance with local tax regulations, aiming to ensure transparency and legality.

    🔮 Prospective Regulations

    • Stablecoins and Asset Tokenization: The BCB plans to regulate stablecoins and asset tokenization in 2025, addressing the rising demand and potential risks associated with these digital assets.

    • Travel Rule Compliance: While formal regulations are pending, the BCB has included discussions on implementing the Financial Action Task Force's (FATF) Travel Rule in its public consultations, indicating future compliance requirements for VASPs.

  • Chile has established a comprehensive legal framework for cryptocurrencies and Virtual Asset Service Providers (VASPs) through the enactment of Law No. 21,521, commonly referred to as the Fintech Law. This legislation, effective since February 3, 2023, aims to promote financial innovation and inclusion by providing clear regulations for fintech companies and digital assets.​

    Legal Status of Cryptocurrencies in Chile

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Chile. The Central Bank of Chile has clarified that crypto-assets do not fulfill the requirements to be considered legal tender. ​

    • Permissible Use: While not legal tender, cryptocurrencies are legally recognized and can be used for private transactions. The Fintech Law defines crypto-assets as digital representations of value that can be transferred, stored, or exchanged digitally. ​

    🧾 Key Legislation and Regulatory Framework

    1. Fintech Law (Law No. 21,521)

    • Enacted: January 4, 2023; effective from February 3, 2023.​

    • Purpose: To regulate financial technology institutions, including those dealing with virtual assets, and to establish an open financial system.​

    • Key Provisions:

      • Defines virtual financial assets as digital representations of units of value, goods, or services, excluding money, that can be transferred, stored, or exchanged digitally.

      • Regulates activities such as crypto exchanges (classified as alternative trading systems), investment advice, custody services, order routing, and brokerage of financial instruments.

      • Mandates that financial service providers register with the Financial Market Commission (Comisión para el Mercado Financiero - CMF) and obtain authorization to operate. ​

    2. General Rule No. 502

    • Issued: Early 2024 by the CMF.​

    • Purpose: To establish the requirements for registration and authorization of financial service providers under the Fintech Law.​

    • Key Provisions:

      • Requires financial service providers to register in the Registry of Financial Service Providers and obtain authorization from the CMF to operate in Chile.

      • Mandates compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, including Know Your Customer (KYC) procedures and reporting of suspicious transactions. ​

    🏦 Regulatory Authorities

    • Financial Market Commission (CMF): Responsible for supervising and regulating financial service providers, including those dealing with virtual assets.​

    • Central Bank of Chile: Oversees monetary policy and has clarified the non-legal tender status of cryptocurrencies.​

    • Servicio de Impuestos Internos (SII): Chile's tax authority, responsible for the taxation of crypto-related activities.​

    💰 Taxation of Cryptocurrencies

    • Capital Gains Tax: Profits from the sale or exchange of cryptocurrencies are subject to capital gains tax under the general tax regime.​

    • Income Tax:

      • Individuals: Income from crypto-related activities is subject to the Global Complementary or Additional Tax, with rates ranging from 0% to 40%.

      • Businesses: Profits are subject to the First Category Tax and the Global Complementary or Additional Tax. ​

    • Value Added Tax (VAT): Service providers offering crypto-related services must charge VAT on their commissions and issue corresponding invoices.​

    • Reporting Obligations: Crypto exchanges and service providers are required to file the Annual Affidavit No. 1891, detailing all trades and related operations.​

    🔮 Prospective Developments

    • Open Finance System: The Fintech Law establishes the groundwork for an open finance system, allowing for the exchange of customer information between different financial or related service providers, promoting competition and financial inclusion. The CMF is tasked with issuing regulations for the operation of this system, with full implementation expected within 24 months of the law's enactment. ​az.cl

    • Central Bank Digital Currency (CBDC): The Central Bank of Chile has announced plans for proof-of-concept testing for a digital peso, moving closer to launching a CBDC.​

    Chile's enactment of the Fintech Law and subsequent regulations demonstrate a commitment to fostering a secure and innovative environment for virtual assets. By establishing clear regulations and oversight mechanisms, the country aims to balance technological advancement with financial integrity.​

  • Colombia does not have a comprehensive legal framework specifically regulating cryptocurrencies. However, various government entities have issued guidelines and statements that shape the current regulatory environment. Recent legislative efforts indicate a move towards formalizing crypto regulations. Below is an overview of the current and prospective laws regulating crypto in Colombia, including specific law numbers and recent developments.

    Legal Status of Cryptocurrencies in Colombia

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Colombia. The Colombian peso remains the sole official currency. ​

    • Permissible Use: While not legal tender, cryptocurrencies are legally recognized and can be used for private transactions. Individuals are allowed to purchase, sell, and possess cryptocurrencies, but there is no obligation for creditors to accept them as a means of payment.

    🧾 Key Legislation and Regulatory Framework

    1. Law 964 of 2005

    • Purpose: Establishes the general framework for the securities market in Colombia.​

    • Relevance to Crypto: The Financial Superintendence of Colombia (SFC) has stated that cryptocurrencies do not constitute securities under the terms of Law 964 of 2005, and therefore, they are not part of the infrastructure of the Colombian securities market.

    2. External Circular 052 of 2017 (SFC)

    • Issued by: Financial Superintendence of Colombia (SFC).​

    • Purpose: Prohibits supervised entities from holding, investing in, or facilitating transactions involving cryptocurrencies.

    3. Regulatory Sandbox Initiatives

    • Timeline: 2021–2023.

    • Purpose: The SFC implemented a regulatory sandbox to allow financial institutions to test crypto-related services in a controlled environment.

    • Outcome: The sandbox concluded in December 2023 without leading to permanent regulatory changes.

    🏦 Regulatory Authorities

    • Banco de la República (Central Bank of Colombia): Oversees monetary policy and has clarified that cryptocurrencies are not recognized as legal currency.

    • Financial Superintendence of Colombia (SFC): Supervises financial institutions and has issued guidelines restricting their involvement with cryptocurrencies. ​

    • Dirección de Impuestos y Aduanas Nacionales (DIAN): Colombia's tax authority, responsible for the taxation of crypto-related activities. ​

    💰 Taxation of Cryptocurrencies

    • Income Tax: Profits from the sale or exchange of cryptocurrencies are subject to income tax. The DIAN considers cryptocurrencies as intangible assets that can generate income.

    • Value Added Tax (VAT): The sale of cryptocurrencies is not subject to VAT. However, services related to the intermediation of cryptocurrencies may be subject to VAT.

    • Accounting Treatment: Cryptocurrencies can be registered in accounting records as fixed assets for individuals or as inventory for companies that sell these virtual products regularly.

    🔮 Prospective Developments

    Proposed Cryptocurrency Regulation Bill (2025)

    • Introduced: March 2025 by Senator Gustavo Moreno and Representative Julián López.

    • Purpose: To establish a comprehensive regulatory framework for cryptocurrencies, including licensing requirements for Virtual Asset Service Providers (VASPs), anti-money laundering measures, consumer protection, and taxation guidelines.

    • Key Provisions:

      • Mandatory licensing for VASPs operating in Colombia.

      • Implementation of anti-money laundering (AML) and counter-terrorism financing (CTF) measures.

      • Consumer protection regulations, including transparency and security requirements for crypto service providers.

      • Taxation guidelines for crypto-related activities. ​

    • Status: The bill is currently under consideration in Congress.​

    Colombia's approach to cryptocurrency regulation is evolving, with recent legislative efforts aiming to provide legal clarity and consumer protection. While cryptocurrencies are not recognized as legal tender, their use is permitted under specific conditions. The proposed regulatory framework seeks to align Colombia's crypto market with international standards, fostering innovation while mitigating risks associated with digital assets.

  • A bill currently under discussion would explicitly classify crypto assets as private property—a distinct approach compared to other LatAm jurisdictions and potentially impactful for ownership rights.

    Costa Rica maintains a permissive yet evolving stance on cryptocurrency regulation. While there is no comprehensive legal framework specifically governing digital assets, recent legislative initiatives indicate a shift towards formal oversight. Below is an overview of the current and prospective laws regulating crypto in Costa Rica, including specific law numbers and recent developments.​

    Legal Status of Cryptocurrencies in Costa Rica

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Costa Rica. The Central Bank of Costa Rica (BCCR) has clarified that digital assets like Bitcoin are not considered currency, are not backed by law, and cannot be traded on Costa Rica's national payment system. ​

    • Permissible Use: Despite not being legal tender, cryptocurrencies are legally recognized for private transactions. The BCCR allows for their use under private agreements, stating that crypto transactions are carried out at the user's own risk, as they are not backed by the government or regulated financial institutions.

    🧾 Key Legislation and Regulatory Framework

    1. Cryptoassets Market Law (Bill No. 23.415)

    • Introduced: October 24, 2022.​

    • Purpose: To regulate the uses and taxation of mining, commercialization, intermediation, exchange, transfer, possession, custody, and administration of crypto assets.​

    • Key Provisions:

      • Defines different types of crypto assets and their uses.

      • Allows private individuals and legal entities to freely agree and accept crypto assets as payment for any type of obligation not prohibited by the Costa Rican legal system.

      • Permits public entities to accept crypto assets for the payment of taxes, fees, and other obligations.

      • Specifies that the mining, possession, transfer, etc., of crypto assets is generally not considered to generate taxable income unless linked to the transferor's profitable activity.

      • Exempts the transfer of crypto assets from VAT, provided they are transferred as private virtual currency to acquire legal tender, other crypto assets, or goods and services.

    2. Bill No. 24.811 – Reporting Obligations for Crypto Asset Service Providers

    • Introduced: February 2025.​

    • Purpose: To establish the obligation for crypto asset service providers in Costa Rica to report information to the Tax Administration, aligning with the OECD's Crypto-Asset Reporting Framework (CARF).

    • Key Provisions:

      • Mandates reporting of information by crypto asset service providers to the Tax Administration.

      • Allows the Tax Administration to exchange information with other jurisdictions under tax cooperation agreements.

      • Proposes penalties for non-compliance, including fines of 2% of the offender's gross income for the previous year, with a minimum of three and a maximum of 100 base salaries.

    🏦 Regulatory Authorities

    • Central Bank of Costa Rica (BCCR): Oversees monetary policy and has issued statements clarifying the non-legal tender status of cryptocurrencies.​

    • General Directorate of Taxation: Responsible for tax administration and has issued guidance on the taxation of crypto assets.​

    • Superintendency of Financial Institutions (SUGEF): Supervises financial institutions and may have oversight over certain crypto-related activities.​

    💰 Taxation of Cryptocurrencies

    • Corporate Income Tax (CIT): Applies to income from crypto-related activities linked to a business.​

    • Capital Gains Tax: Applies to profits from the sale of crypto assets not linked to a business activity.​

    • Value Added Tax (VAT): Applies to fees for services related to the organization, verification, or exchange of virtual assets.​

    • Private Letter Ruling (No. MH-DGT-OF-0460-2023): Issued on August 23, 2023, this ruling clarifies that cryptocurrencies are considered virtual (intangible) assets and outlines their tax treatment under existing laws.

    🔮 Prospective Developments

    • Regulatory Outlook: While Costa Rica currently lacks comprehensive crypto-specific legislation, the introduction of Bills No. 23.415 and 24.811 indicates a move towards formal regulation. The government is monitoring developments in the crypto sector and may implement further regulations in alignment with international standards.

    Costa Rica's approach to cryptocurrency regulation is characterized by a balance between permissiveness and caution. While the country currently lacks comprehensive crypto-specific legislation, recent legislative initiatives indicate a move towards formal oversight. Entities engaging in crypto-related activities should stay informed about these developments and ensure compliance with existing financial and tax regulations.

  • Legal Status of Cryptocurrencies in Ecuador

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Ecuador. The Central Bank of Ecuador (BCE) has clarified that digital assets like Bitcoin are not authorized as a means of payment and are not backed by any authority, emphasizing their speculative nature.

    • Permissible Use: Despite the prohibition on their use as legal tender, the purchase and sale of cryptocurrencies through the internet are not prohibited. Ecuadorians are allowed to hold and trade digital assets, although such activities are not regulated by the financial authorities. ​

    🧾 Key Legislation and Regulatory Framework

    1. Organic Monetary and Financial Code (Código Orgánico Monetario y Financiero)

    • Article 98: Prohibits the circulation and receipt of any currency not authorized by the Monetary and Financial Policy and Regulation Board, effectively banning the use of cryptocurrencies as a means of payment within the country.

    2. Organic Law for the Development, Regulation, and Control of Technological Financial Services (Fintech Law)

    • Enacted: December 22, 2022.​

    • Purpose: To provide a legal framework for the development and regulation of financial technology services in Ecuador.

    • Key Provisions:

      • Classifies fintech activities into categories such as technological infrastructures for payment channels, specialized electronic deposit and payment companies, and financial technology services.

      • Requires fintech companies to be properly incorporated in Ecuador and obtain authorization from relevant regulatory bodies.

      • Does not explicitly regulate cryptocurrencies or virtual assets, leaving a gap in the legal framework concerning digital currencies.

    3. Executive Decree No. 903

    • Issued: November 7, 2023.​

    • Purpose: To regulate the Fintech Law by assigning responsibilities to various regulatory bodies, including the Central Bank of Ecuador, the Superintendency of Banks, and the Superintendency of Companies, for licensing and supervision of fintech activities.

    🏦 Regulatory Authorities

    • Central Bank of Ecuador (BCE): Oversees monetary policy and has issued statements clarifying the non-legal tender status of cryptocurrencies.​

    • Superintendency of Banks (SB): Supervises financial institutions and is involved in the regulation of fintech entities.​

    • Superintendency of Companies (SCVS): Responsible for the oversight of corporate entities, including fintech companies.​

    💰 Taxation of Cryptocurrencies

    • Income Tax: Profits from cryptocurrency trading are subject to income tax. Individuals are taxed based on a progressive rate ranging from 0% to 35%, while corporations are generally subject to a corporate income tax of 25%.

    • Capital Gains Tax: Capital gains from the sale of cryptocurrencies are taxable. The specific rate depends on the nature of the transaction and the taxpayer's profile. ​

    🔮 Prospective Developments

    • Regulatory Outlook: While the Fintech Law provides a framework for financial technology services, it does not explicitly address cryptocurrencies. The Central Bank of Ecuador has indicated plans to issue regulations to bring clarity and contribute to the prevention of financial crimes such as money laundering.

    • Public Adoption: Despite regulatory restrictions, there is a growing interest in cryptocurrencies among Ecuadorians. The presence of cryptocurrency ATMs in cities like Quito and Cuenca reflects this trend.

    Ecuador's approach to cryptocurrency regulation is characterized by caution and a focus on maintaining monetary stability. While the trading and possession of digital assets are permitted, their use as a means of payment is prohibited. The recent enactment of the Fintech Law marks a step towards a more structured regulatory environment, although specific regulations concerning cryptocurrencies remain to be developed.

  • In a major policy reversal, the country rescinded Bitcoin’s legal tender status in January 2025. BTC remains legal but is no longer mandatory for transactions or taxes.

    Legal Status of Cryptocurrencies in El Salvador

    • Bitcoin's Legal Tender Status: On June 8, 2021, El Salvador's Legislative Assembly passed the Bitcoin Law (Decree No. 57), making Bitcoin legal tender alongside the U.S. dollar. The law came into effect on September 7, 2021.

    • Amendments to the Bitcoin Law: On January 29, 2025, the Legislative Assembly approved Decree No. 199, amending the Bitcoin Law to eliminate the mandatory acceptance of Bitcoin for payments. This change, effective April 1, 2025, means that while Bitcoin remains legal tender, merchants are no longer obliged to accept it.

    🧾 Key Legislation and Regulatory Framework

    1. Bitcoin Law (Decree No. 57)

    • Purpose: To regulate Bitcoin as legal tender with unrestricted liberating power in any transaction.​

    • Key Provisions:

      • Article 1: Recognizes Bitcoin as legal tender.

      • Article 7: Initially mandated that every economic agent must accept Bitcoin as payment.

      • Article 12: Exempted Bitcoin transactions from capital gains tax.​

    • Implementation: The government launched the "Chivo Wallet" to facilitate Bitcoin transactions and provided incentives to encourage adoption.​

    2. Amendment to the Bitcoin Law (Decree No. 199)

    • Purpose: To modify the original Bitcoin Law by removing the obligation for merchants to accept Bitcoin.​

    • Key Changes:

      • Article 7: Amended to make the acceptance of Bitcoin optional for merchants.​

    • Effective Date: April 1, 2025.​

    3. Digital Assets Issuance Law (LEAD)

    LEAD established a robust framework for various digital assets, extending beyond cryptocurrencies. It introduced the National Commission of Digital Assets (CNAD) as the central regulatory authority responsible for licensing, oversight, and enforcement of digital asset regulations.​

    Key features of LEAD include:​

    • Tax Incentives: The law offers indefinite elimination of duties and taxes on digital investments' nominal value and income, encompassing VAT, Income Tax, Municipal Tax, and other obligations.

    • Mandatory Registration: All issuers, certifiers, service providers, and public offerings must be verified and registered with the CNAD.​

    • Regulatory Oversight: The CNAD holds the authority to authorize, suspend, revoke, or cancel registrations of service providers and certifiers.​

    🔄 Reforms to LEAD in August 2024

    In August 2024, the Legislative Assembly approved significant reforms to LEAD, aiming to enhance the regulatory environment for digital assets. ​

    The reforms introduced:​

    • Expanded Powers for CNAD: The CNAD was granted sole responsibility for regulating, supervising, and sanctioning the digital asset industry, including tokens and stablecoins.​

    • Updated Definitions: Modifications to definitions and concepts related to digital asset issuance and stablecoins were made to align with international standards.​

    • Enhanced Compliance Measures: Digital Asset Service Providers (DASPs) and Bitcoin Service Providers (BSPs) are now required to adopt new anti-money laundering (AML), counter-terrorism financing (CTF), and counter-proliferation of weapons of mass destruction (CPWMD) measures and programs.​

    • Transparency Initiatives: The reforms emphasize transparency in the development and implementation of digital asset regulations.​

    📈 Current Status and Impact

    As of April 2025, LEAD has facilitated the registration of 39 asset providers in El Salvador. The CNAD continues to play a pivotal role in overseeing the digital asset sector, ensuring compliance with the established legal framework.​

    The law's implementation has positioned El Salvador as a progressive jurisdiction in the realm of digital finance, attracting international attention and investment.

    📅 Compliance and Regulatory Oversight

    • Regulatory Bodies:

      • Central Reserve Bank of El Salvador (BCR): Oversees monetary policy and financial system stability.

      • Superintendency of the Financial System (SSF): Regulates and supervises financial institutions, including those dealing with cryptocurrencies.​

    • Licensing Requirements: Entities offering services related to cryptocurrencies must obtain appropriate licenses from the SSF and comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.​

    💰 Taxation and Financial Reporting

    • Tax Exemptions: Under the original Bitcoin Law, transactions in Bitcoin were exempt from capital gains tax.​

    • Reporting Obligations: Financial institutions and service providers dealing with cryptocurrencies are required to report transactions to the relevant authorities to ensure compliance with AML and CTF laws.​

    🔮 Prospective Developments​

    • Bitcoin Bonds and Bitcoin City: The government has proposed the issuance of "Bitcoin Bonds" to fund infrastructure projects, including the development of "Bitcoin City," a planned urban area powered by geothermal energy and focused on cryptocurrency mining and innovation.​

    El Salvador's approach to cryptocurrency regulation continues to evolve, balancing innovation with regulatory oversight. The amendments to the Bitcoin Law reflect a shift towards providing greater flexibility for businesses while maintaining the legal status of Bitcoin.

  • The Fintech Law (2018) regulates digital assets, including crypto exchanges and wallets. Tax and AML/KYC compliance are required.

    Legal Status of Cryptocurrencies in Mexico

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Mexico. The Central Bank of Mexico (Banxico) has clarified that virtual assets do not fulfill the requirements to be considered legal tender.

    • Permissible Use: While not legal tender, cryptocurrencies are considered legitimate for private transactions and are treated as movable intangible property under Mexican law.

    🧾 Key Legislation and Regulatory Framework

    1. FinTech Law (Ley para Regular las Instituciones de Tecnología Financiera)

    • Enacted: March 9, 2018.​

    • Purpose: To regulate financial technology institutions, including those dealing with virtual assets.​

    • Key Provisions:

      • Defines virtual assets as electronically recorded representations of value used among the public as a means of payment.

      • Establishes requirements for entities such as crowdfunding platforms and electronic payment fund institutions (EPFIs) to operate with virtual assets. ​applicable to credit institutions and financial technology institutions in transactions involving virtual assets.​

    • Key Provisions:

      • Restricts financial institutions from offering virtual asset services directly to clients; such operations are limited to internal purposes and require prior authorization from Banxico.

    3. Anti-Money Laundering (AML) Regulations

    • Applicable Law: Federal Law for the Prevention and Identification of Operations with Illicit Proceeds.​

    • Requirements:

      • Entities dealing with virtual assets must implement Know Your Customer (KYC) procedures.

      • Transactions exceeding approximately $2,849 USD must be reported to authorities.

    💰 Taxation of Cryptocurrencies

    • Income Tax: Profits from the sale or exchange of cryptocurrencies are subject to income tax rates ranging from 1.92% to 35%, depending on the individual's income level. ​

    • Value Added Tax (VAT):

      • A 16% VAT applies to the sale of crypto-assets if both the buyer and seller are located in Mexico.

      • If the buyer is located abroad, the transaction may be considered an export and be exempt from VAT.

    🏦 Regulatory Authorities

    • Banxico (Central Bank of Mexico): Responsible for monetary policy and overseeing financial institutions' operations with virtual assets.​

    • CNBV (National Banking and Securities Commission): Supervises and regulates financial entities, ensuring compliance with financial laws and regulations.​

    • SHCP (Ministry of Finance and Public Credit): Establishes fiscal policies and oversees broader financial regulations.

    🔮 Prospective Developments

    • Central Bank Digital Currency (CBDC): Banxico has announced plans to launch a digital currency by 2025 to promote financial inclusion and digital payments.​

    • Regulatory Sandbox: The FinTech Law provides for a regulatory sandbox allowing fintech and crypto startups to test innovations in a controlled environment for up to two years.

    Mexico's regulatory approach to cryptocurrencies is characterized by cautious integration, balancing innovation with financial stability and consumer protection. Entities and individuals engaging in crypto-related activities should ensure compliance with existing laws and stay informed about forthcoming regulatory developments.​

  • Legal Status of Cryptocurrencies in Panama

    • Permissible Use: Cryptocurrencies are legal to use, trade, and hold in Panama. There are no laws prohibiting their use, and activities such as token issuance and promotion are unregulated but legal.

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender. Their use as a means of payment is optional and based on mutual agreement between parties.

    🧾 Key Legislation and Regulatory Framework

    1. Draft Cryptocurrency Regulation Bill (March 2025)

    • Purpose: To establish a legal framework for the use of cryptocurrencies and blockchain-based services in Panama.

    • Key Provisions:

      • Recognizes cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and stablecoins as valid payment methods for goods, services, and debt settlements.

      • Mandates licensing requirements for Virtual Asset Service Providers (VASPs), including exchanges and wallets, which would need to register with Panama’s Financial Analysis Unit (UAF).

      • Enforces compliance measures, including Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulations, in line with international financial standards.

      • Recognizes smart contracts as legally enforceable, facilitating automated financial products and business processes.

      • Encourages the use of blockchain technology in public administration, including digital identity systems and tokenized securities.

    2. Previous Legislative Efforts

    • In 2022, Panama's National Assembly approved a bill to regulate cryptocurrencies, but it was vetoed by President Laurentino Cortizo due to concerns over AML compliance.

    🏦 Regulatory Authorities

    • Financial Analysis Unit (UAF): Responsible for overseeing AML and KYC compliance for VASPs under the proposed legislation.​

    • Superintendency of Banks of Panama (SBP): While not currently regulating cryptocurrencies, the SBP has issued notices advising caution regarding digital assets.

    • Superintendency of the Securities Market (SMV): Has clarified that virtual assets like cryptocurrencies are not recognized as securities or currencies under current regulations.

    💰 Taxation of Cryptocurrencies

    • Foreign-Sourced Income: Panama does not tax income earned outside the country. Therefore, profits from cryptocurrency transactions conducted abroad are not subject to local taxation.

    • Domestic Transactions: The tax treatment of cryptocurrency transactions within Panama remains undefined, leading to potential ambiguities for businesses and individuals.​

    🔮 Prospective Developments

    • Municipal Adoption: In April 2025, Panama City Council voted to accept cryptocurrencies, including BTC, ETH, USDC, and USDT, for payments of taxes, fees, and permits, marking a significant step in public sector adoption.

    • Regulatory Outlook: The proposed cryptocurrency regulation bill is under review in the National Assembly. If enacted, it would provide legal clarity, encourage innovation, and align Panama with international financial standards.

    Panama's evolving approach to cryptocurrency regulation reflects a balance between fostering innovation and ensuring compliance with global financial standards. The country's favorable tax laws and strategic location position it as a potential hub for blockchain and fintech development in Latin America.

  • Peru is cautiously progressing toward a structured regulatory framework for cryptocurrencies and Virtual Asset Service Providers (VASPs). While cryptocurrencies are not recognized as legal tender, they are not prohibited, allowing individuals and businesses to engage in crypto-related activities within certain regulatory boundaries.

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Peru. The Central Reserve Bank of Peru (BCRP) has clarified that virtual assets do not fulfill the requirements to be considered legal tender. ​

    • Permissible Use: Despite not being legal tender, cryptocurrencies are considered legitimate for private transactions and are treated as movable intangible property under Peruvian law.

    🧾 Key Legislation and Regulatory Framework

    1. Supreme Decree No. 006-2023-JUS

    • Enacted: July 2023.​

    • Purpose: To incorporate Virtual Asset Service Providers (VASPs) as obligated entities under Peru's anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.​

    • Key Provisions:

      • VASPs must register with the Financial Intelligence Unit (UIF-Peru).

      • Obligated to implement AML/CTF compliance programs, including Know Your Customer (KYC) procedures and reporting of suspicious transactions.

    2. SBS Resolution No. 02648-2024

    • Enacted: September 2024.​

    • Purpose: To establish specific rules for the prevention of money laundering and terrorist financing applicable to VASPs.​

    • Key Provisions:

      • VASPs must implement a System for the Prevention of Money Laundering and Terrorist Financing (SPLAFT).

      • Obligated to conduct customer due diligence, monitor transactions, and report suspicious activities to UIF-Peru.​

    3. Bill No. 1042/2021-CR – Framework Law for the Commercialization of Cryptoassets

    • Status: Introduced in December 2021 and currently under discussion in Congress.​

    • Purpose: To define cryptoassets and establish a regulatory framework for their commercialization.​

    • Key Provisions:

      • Creation of a public registry for crypto service providers.

      • Requirement for service providers to inform users that cryptocurrencies are not legal tender.

      • Recognition of cryptoassets as property or intangible assets, allowing companies to incorporate and hold them.​

    🏦 Regulatory Authorities

    • Superintendency of Banking, Insurance and AFPs (SBS): Supervises financial institutions and enforces AML/CTF regulations.​

    • Superintendency of Securities Market (SMV): Oversees securities regulation and has issued warnings regarding the risks associated with cryptoassets.​

    • Central Reserve Bank of Peru (BCRP): Responsible for monetary policy and has initiated a Central Bank Digital Currency (CBDC) pilot program targeting unbanked regions.​

    • National Superintendency of Customs and Tax Administration (SUNAT): Oversees taxation of crypto gains and has moved towards integrating digital assets into the existing taxation system.​

    💰 Taxation of Cryptocurrencies

    • Companies: Profits from the sale or transfer of cryptocurrencies are taxed as capital gains at a flat rate of 29.5%.​

    • Individuals:

      • Occasional transactions are generally not taxed.

      • Regular trading activities are subject to income tax rates ranging from 8% to 30%, depending on total income.​

    • Value Added Tax (VAT): Not applicable to crypto transactions, as they are considered transfers of intangible assets.​

    • Financial Transactions Tax (FTT): Applies when funds from crypto transactions are transferred to local bank accounts. ​

    🔮 Prospective Developments

    • Central Bank Digital Currency (CBDC): In April 2024, the BCRP launched a CBDC pilot program aimed at enhancing financial inclusion in unbanked regions.

    • Regulatory Sandbox: Peru has established a regulatory sandbox allowing fintech and crypto startups to test innovations in a controlled environment.

    Peru's approach to cryptocurrency regulation is evolving, with recent measures focusing on AML/CTF compliance and taxation. While comprehensive legislation is still under discussion, the current framework provides a foundation for the responsible use and development of cryptoassets in the country.

  • On September 10, 2024, Uruguay passed a new law regulating crypto assets and service providers—one of the most forward-looking in the region.

    Legal Status of Cryptocurrencies in Uruguay

    • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Uruguay. The Uruguayan Peso remains the sole official currency.​

    • Permissible Use: Despite not being legal tender, cryptocurrencies are legally recognized as "virtual assets" under Law No. 20,345. This recognition allows for their use in various transactions, subject to regulatory oversight.​

    🧾 Key Legislation and Regulatory Framework

    1. Law No. 20,345 – Virtual Assets Law (VAL)

    Enacted in October 2024, the VAL provides a legal framework for the regulation of virtual assets and VASPs. Key provisions include:

    • Definition of Virtual Assets: Digital representations of value or contractual rights that can be stored, transferred, and traded electronically through distributed ledger technology (DLT) or similar technologies.​

    • Regulatory Authority: The Central Bank of Uruguay (Banco Central del Uruguay - BCU) is designated as the primary regulator for VASPs, responsible for issuing licenses and overseeing compliance.​

    • Supervision of VASPs: The Superintendence of Financial Services (SSF), a division within the BCU, is tasked with supervising the activities of exchanges, wallets, and miners classified as VASPs, ensuring compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.​

    • Integration with Existing Laws: The VAL amends existing legislation, including:​

      • Law No. 16,696: Updates the Central Bank's charter to include VASPs within its regulatory scope.​

      • Law No. 18,627: Modifies the Securities Market Law to classify virtual assets as book-entry securities, introducing a new category for decentralized ledger-based securities.

    🏦 Virtual Asset Service Providers (VASPs)

    Under the VAL, VASPs are defined as entities that habitually and professionally provide one or more virtual asset services to third parties. These services include:

    • Exchange between virtual assets and fiat currencies.​

    • Exchange between different virtual assets.​

    • Transfer of virtual assets.​

    • Custody or administration of virtual assets or instruments enabling control over virtual assets.​

    • Participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset.

    VASPs operating in Uruguay are required to obtain authorization from the BCU, which will assess applications based on legality, opportunity, and convenience.

    📅 Compliance and Enforcement

    • Licensing: VASPs must apply for a license from the BCU to operate legally within Uruguay. The BCU evaluates applications based on criteria such as the legality of operations and the convenience of services offered. ​

    • AML/CFT Compliance: VASPs are subject to stringent AML and CFT regulations, aligning with international standards to prevent illicit activities. ​

    • Penalties for Non-Compliance: Entities operating without proper authorization or failing to comply with regulatory requirements may face sanctions, including fines and revocation of licenses. ​

    🔮 Prospective Developments

    Uruguay's regulatory framework for virtual assets is designed to be adaptable, allowing for future developments in the digital asset space. The BCU is expected to issue further regulations and guidelines to address emerging technologies and market trends, ensuring that the country's legal infrastructure remains responsive to the evolving landscape of virtual assets.

    Uruguay's enactment of Law No. 20,345 demonstrates its commitment to fostering a secure and innovative environment for virtual assets. By establishing clear regulations and oversight mechanisms, the country aims to balance technological advancement with financial integrity.​

  • Venezuela's cryptocurrency landscape is characterized by a complex interplay of state-led initiatives, regulatory challenges, and widespread public adoption driven by economic instability. Below is an overview of the current and prospective laws regulating crypto in Venezuela, including specific law numbers and recent developments.​

    Legal Status of Cryptocurrencies in Venezuela

    • Legal Recognition: Cryptocurrencies are legally recognized in Venezuela. The government has established a regulatory framework that allows for the creation, circulation, and use of cryptoassets by individuals and legal entities in both the public and private sectors.

    • State-Issued Cryptocurrency: The Venezuelan government introduced its own cryptocurrency, the Petro (PTR), in 2018, backed by the country's oil and mineral reserves. However, its adoption has been limited, and it has faced significant challenges, including lack of transparency and international skepticism.

    🧾 Key Legislation and Regulatory Framework

    1. Constituent Decree on Cryptoassets and the Petro Sovereign Cryptocurrency

    • Enacted: April 9, 2018.​Norton Rose Fulbright

    • Purpose: To establish a legal framework for the creation, circulation, use, and exchange of cryptoassets, including the Petro.​Wilson Center+5Norton Rose Fulbright+5Elliptic+5

    • Key Provisions:

      • Empowers the National Executive to regulate the creation, issuance, organization, operation, and use of cryptoassets.

      • Authorizes the operation of virtual exchanges dealing with cryptoassets created by the National Executive.

      • Establishes a registry for virtual miners, exchanges, and other entities involved in cryptoasset activities.

    2. Decree No. 3.196

    • Enacted: December 8, 2017.​

    • Purpose: To create the Superintendency of Cryptoassets and Related Activities (SUNACRIP), the regulatory body overseeing cryptoasset activities in Venezuela.

    • Key Provisions:

      • Establishes SUNACRIP as the authority responsible for regulating, controlling, and supervising cryptoasset activities.

      • Grants SUNACRIP the power to issue licenses and permits for cryptoasset-related operations.

    3. Ley Antibloqueo (Anti-Blockade Law)

    • Enacted: October 9, 2020.

    • Purpose: To provide the government with tools to counteract the effects of international sanctions, including the use of cryptocurrencies for international transactions.​

    • Key Provisions:

      • Allows the government to conduct operations in cryptocurrencies to circumvent sanctions.

      • Permits the classification of certain information as confidential to protect economic interests. ​

    🏦 Regulatory Authorities

    • SUNACRIP (Superintendency of Cryptoassets and Related Activities): The primary regulatory body overseeing the cryptoasset sector in Venezuela. It is responsible for issuing licenses, supervising operations, and ensuring compliance with regulations.

    • Cryptoassets Treasury: A state-owned entity under the Vice-Presidency, dedicated to the issuance, custody, and management of cryptoassets.

    💰 Taxation of Cryptocurrencies

    • Income Tax: Profits from cryptoasset transactions are subject to income tax. The specific rates and regulations are determined by the national tax authority.​

    • Value Added Tax (VAT): Certain cryptoasset transactions may be subject to VAT, depending on the nature of the goods or services involved.​

    • Payment of Penalties: Article 47 of the relevant law allows fines and penalties to be paid in either cryptoassets or bolivars, as determined by SUNACRIP.

    🔮 Prospective Developments

    • Reorganization of SUNACRIP: In March 2023, SUNACRIP underwent a significant reorganization following a corruption scandal involving the mismanagement of $21 billion in oil revenues through cryptoasset transactions. The reorganization has led to increased scrutiny and a temporary suspension of certain cryptoasset activities.

    • Increased Use of Stablecoins: Due to economic instability and hyperinflation, Venezuelans have increasingly turned to stablecoins like USDT and USDC for transactions and savings. Between July 2023 and July 2024, 47% of transactions under $10,000 were conducted using stablecoins.

    Venezuela's approach to cryptocurrency regulation reflects a blend of state-led initiatives and grassroots adoption. While the government has established a legal framework to promote and control cryptoasset activities, challenges such as corruption and economic instability continue to influence the sector's development.​