Legislation to regulate Uruguay’s crypto sector is moving forward with delay, threatening to create deep structural gaps, establish prohibitive economic barriers and exclude startups from the local ecosystem.
This was the claim made by Juan Manuel Sobral, president of the Uruguay Blockchain Chamber and co-founder of SpaceDev, who spoke with CriptoNoticias in the framework of the “Be Orange” event held in Montevideo last Sunday.
Sobral asserts that official proposals to regulate the sector are incomplete and rigid due to traditional approaches. In his opinion, Unable to adapt to the nature of disruptive technology.
The expert said the design of the regulatory framework, updated in March and subject to public consultation, shows a lack of technical understanding on the part of local authorities, creating a situation that, in his words, “crushes start-ups”. Before integrating the business model domestically.
Mr. Sobral questioned the fact that currently companies wishing to operate in this area must put down a deposit of about $100,000. In his view, this amount “remains a very large amount of fixed capital and is slowing down small businesses.”
The president of the Chamber of Trade Unions said that this economic situation is creating a “barrier to entry” for companies in this sector and creating a hostile environment for the development ecosystem. It destroys the possibility of nurturing the project in its early stages.
Sobral warned of the dangers of stifling regional innovation:
What’s happening now is they are killing startups. That’s what I’m most concerned about. It’s illegal to set up a company here, so no one will try anything. No one understands anything, but you can’t invest in something like that. But you can’t stop people from trying either. I think if you set very high requirements that cannot be met in order to be included in the registry, those companies will disappear. Well, I don’t think they’ll ever go away. I think they’ll open somewhere else.
Juan Manuel Sobral.
This project “excludes” the main elements of cryptocurrencies
One of the most important points made by experts is that Complete lack of basic operational distinctionssuch as the distinction between service providers that hold funds in custody and service providers that operate in a non-custodial manner.
For him, what the project will do is ensure that all companies are authorized by the Central Bank of Uruguay (BCU) without distinction, and “also seek guarantees from non-custodial platforms and make companies that operate in this way responsible for problems.”
“I think the current regulations are too focused on replicating foreign exchange and stock market regulations, and ignore the myriad business applications that are happening right now that don’t make sense to ignore,” he said.
Sobral said the regulator’s proposal calls for similar approvals and financial guarantees for the business model. Completely different levels of execution and risk.
For our interviewees, this rigidity hinders the development of innovative tools that are already used in other nearby jurisdictions. Argentina, Bolivia, Peru, etc.
The enthusiasts also pointed out that the proposed regulatory framework leaves the development of non-fungible tokens (NFTs) and the tokenization of real-world assets (RWA) in legal ambiguity. He stressed that if the country is to implement laws that will take years to amend, it is essential to consider these tools from the beginning.
“There’s no talk about tokenization, there’s no talk about NFTs, there’s no talk about a lot of things that I think need to be discussed. And I think if we’re going to regulate something that would require us to amend the regulations in four years, we need to look at that,” he said.
Sobral said the “exemption of key elements” of the regulatory project, which is expected to take effect at the end of this year, Local government ignorancebecause “they don’t understand what is being regulated.”
Furthermore, it warned about the lack of fundamental operational differentiation and the replication of analog financial models in the crypto asset market. For him, these These are the main triggers of anxiety in Uruguay’s industry.
Faced with this scenario, the Uruguay Blockchain Chamber was driven to: Submit a report with detailed critical comments Regarding the regulatory project of the Central Bank of Uruguay. In it, they also present their own proposals for regulating this sector.
However, the direct result of this rigidity is not the eradication of projects, but rather international regulatory arbitration. Given Montevideo’s obstacles, local developers may choose to register their companies in jurisdictions with greater flexibility and lower start-up costs, operate remotely, and deprive the Uruguayan state of tax collection and formalization of the sector.
Sobral concluded that “Uruguay will not sell Uruguay.” Uruguay sells to the world. If you don’t find a company here, you have to assume you’ll be looking for a company with some kind of regulation that allows you to work remotely. You can either form a company in Panama and pay $2,000 a year, or you can form a company in the US and be done with it. And we lose the possibility of regulating local markets.
(Tag translation) Bitcoin (BTC)
