Is Cryptocurrency Legal in South America?

Is Cryptocurrency Legal in South America?

According to there are currently no restrictions on bitcoin or other cryptocurrencies in 105 countries around the world. As a whole, cryptocurrencies are fast taking off in South America, with almost half of its population not possessing a bank account; however, the majority of the population do have access to a smartphone or computer. Here is a quick look at the status of digital currencies in key South American markets.


Cryptocurrencies can be considered as money in the country, as well as a commodity or good. Argentina also boasts a mature cryptocurrency market, with several exchanges and blockchain startups operating to serve demand.


The Central Bank banned cryptocurrencies back in 2014 as it considered them to be pyramid schemes, making Bolivia the first country in South America to outlaw digital currencies. Last year, 60 cryptocurrency promoters were arrested by the Bolivian Financial System Supervision Authority (ASFI) for organizing training activities related to cryptocurrency investments.


Regulators in Brazil have prevented funds from investing in cryptocurrencies as they cannot be considered financial assets, but the Central Bank (CVM) has set up a working group to discuss potential regulations for cryptocurrency investments. CVM is also developing its own blockchain platform as the cryptocurrency market in Brazil goes from strength to strength.


Earlier this year, several Chilean banks shut down the bank accounts of cryptocurrency exchange Buda, citing a lack of regulation, before shifting their position to concerns about money laundering. However, the Free Market Court ordered two banks to reopen those accounts until the case is concluded, which might signal a change in stance at a governmental level. In addition, the president of Chile’s central bank has indicated that they are considering regulating cryptocurrency in the country.


There was some confusion in 2017, with the Colombian government declaring that bitcoin was taxable, despite not being recognized as legal tender. As of now, there is no active cryptocurrency regulation in the country, but the Colombian Senate has engaged in debates about potentially regulating the industry. However, the Buda exchange had its bank accounts closed down recently, indicating that there is still a long way to go.


The government does not recognize bitcoin and other cryptocurrencies as legal tender, but it is not illegal to trade digital assets. This loophole prompted a local cryptocurrency consultancy group to set up ATMs in the capital Quito, providing a simple and safe way for people to buy and sell crypto. However, the Central Bank has not taken kindly to this, declaring the ATMs illegal because it is not supported by a financial institution under the Superintendency of Banks.


Last year, the Central Bank of Uruguay (BCU) announced a pilot program of digitizing the Uruguayan peso, but stressed that it was not a cryptocurrency. In an interview with Sputnik News, the chairman of the BCU, Mario Bergara, reiterated that cryptocurrencies lacked reliability and trust to become a real currency. He added that the lack of regulation of cryptocurrency made it an attractive option to launder money. At the moment, cryptocurrency is not explicitly outlawed or approved by the government.


The country’s own oil-backed cryptocurrency, petro, has been declared as legal tender by President Nicolas Maduro, with all government institutions accepting it as a form of payment. In addition, Venezuela’s Constituent Assembly recently approved a new decree on the usage of cryptocurrencies as a whole. Despite its many critics, the petro was formed to get around US sanctions that have limited Venezuela’s access to foreign funds, with about 95% of its income tied to oil exports.

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