Crypto in South America: A Map of the Region’s Regulatory Landscape

The regulatory framework around crypto across Latin America varies from full adoption to rejection and prohibition.

Argentina has had initiative to regulate crypto, but no significant progress has been made. New controls are expected in line with the requests of the International Monetary Fund (IMF) for the prevention of money laundering and strengthening tax collection to meet the fiscal deficit target.

In Brazil, four bills have been presented for the regulation of cryptocurrencies, whose common objective was the obligation to comply with anti-money laundering and apply consumer protection codes. If, and when Brazil regulates crypto, it will be the largest in Latin America.

In Chile, a Bitcoin bill was presented to Congress at the end of 2021. It aims to generate a safe environment and provide protection for both crypto owners, financial intermediaries and those who interact with the digital currency market.

Source: Cointelegraph Research terminal

In Colombia, the country’s financial supervisory body has approved the use of a regulatory sandbox that aims to experiment with and study a series of regulations for cryptocurrencies.

In Peru, Congress has begun a debate on the draft framework law for the trading of crypto assets which proposes the creation of a public registry of crypto service providers and the obligation to report ‘suspicious operations’ to the country’s financial intelligence unit.

In Uruguay, the fintech chamber created the cryptocurrency Commission in 2018. The fintech chamber combined with the central bank, created a working group dedicated to studying cryptocurrency And creating a document with further details of a possible regulatory framework. [1]

Brazil’s Senate Approves Bitcoin Law to Regulate Cryptocurrencies

The Brazilian Senate has passed the first bill governing cryptocurrencies which sets the stage for the country’s crypto industry. The bill must be approved by the Chamber of Deputies and then signed off by President Jair Bolsonaro.

The session concentrated on the appropriate penalties for crypto crimes with a focus on fraud. Senator Arns said that the penalty for this type of crime should be scaled proportionately to the amount of fraud, money laundering and other white collar crimes committed.

On the whole, the bill does not appear to face many challenges, as Brazil is keen to follow the largest economies in the world, and facilitate the mining of these coins on Brazilian soil. [2]

Chile Moves to Create a National Health Service

The Chilean Constitutional Convention voted this week to create a national health service. A national health service was a central demand behind the country’s 2019 social unrest. Under the plan, to be financed at least in part through a levy on all workers, including those who use private health insurance, will pay into the state system in future. Citizens will be able to take out private insurance too, but this will be at an additional cost.

The private health insurers, known as Isapres insure less than a sixth of Chileans and they receive almost half of the income from the 7% levy on wages dedicated to health. The goal is to improve services for 80% of the population who depends on an overstretched state system. However, at the same time the middle class will be pushed into a health service which already has over 2 million on waiting lists. [3]

Venezuela’s Inflation Slows Down to Lowest in Almost a Decade

Venezuela’s inflation slowed down further to reach 1.4% in March, its lowest level in almost a decade. Nicolas Maduro’s government began easing foreign exchange controls to allow wider circulation of hard currency, leading to more stable prices.

Rising prices are still among the main problems affecting many families in the country. Price increase in the last 12 months reached 284.4%, whilst inflation in Q1 was 11.4%. The country experienced hyperinflation until last year, and minimum wage in the country is equivalent to $30 a month.

The inflation’s deceleration trend could be reversed following this month’s tax implementation for operations in hard currency, a move by Maduro to boost the government’s income. [4]

Source: IMF: World Economic Outlook Database October 2021 and Statista

Ukraine War Offers Latin America Opportunity to Boost Exports - IMF

The war in Ukraine offers Latin America the opportunity to boost exports. The IMF says the region can play a role in alleviating commodity shortages caused by Russia’s invasion. The war in Ukraine and the western sanctions on Russia have led to a sharp jump in global food prices and sent companies desperately rushing for alternative sources of supply.

“You have a shock where you lack commodities, food commodities and energy and also metals, there is a food security issue and [Latin America] is seen as the one that will help us overcome the problems,” Ilan Goldfajn, director of the fund’s western hemisphere department, told the Financial Times in an interview this week. Latin America, he added, was “seen by investors as sufficiently far from the center so that it looks like . . . this region can actually be part of the solution”. [5]

 “High interest rate spreads and low credit availability is a persistent problems in Latin American banking in spite of the recent financial sector reforms. DeFi is rewriting the rules of financial inclusion and Integra is excited to be backing founders part of this revolution” 
Francesca Whalen – Managing Partner at Integra Groupe

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