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Has the Uruguayan Central Bank Taken a Crypto U-turn?

Tim Alper
Last updated: | 2 min read

Uruguay’s financial chiefs appear to have made a volte-face on cryptocurrency and blockchain policy – and may look to embrace crypto- and blockchain-powered finance instead of pushing it to the sidelines.

Alberto Graña, governor of the Banco Central del Uruguay. Source: a video screenshot, Youtube, Felipe Buitrago

Per a report from media outlet Criptonoticias, Alberto Graña, governor of the country’s central bank, the Banco Central del Uruguay (BCU), told attendees at a blockchain conference that the “best thing that can happen” to the country’s blockchain industry would be “to have an attentive regulator that promotes healthy development.”

Regulators in the country have previously spoken about imposing strict guidelines on crypto-enterprises, and have expressed concerns about cryptocurrency usage in money laundering, terrorism and drug trafficking schemes, with some in the government hinting that a full-on crypto ban could even be considered.

Authorities have also called for greater transparency in cryptocurrency dealings, and last year the country’s top fintech regulator stated, per an Infobae report, that “no activity may be developed outside of the regulatory sphere, especially when such activity could concern the financial system.”

However, Graña hinted that the government may now be prepared to soften its stance.

He stated,

“Regulations […] are a global discussion. We will focus on creating risk-based regulations that let us take advantage of the opportunities of new systems and the digital revolution – to help remove entry barriers, reduce transaction costs, boost efficiency and bring other benefits.”

The governor also spoke about improving the country’s wholesale and retail payment ecosystem, and talked of creating a healthy rivalry in the payments sphere, with the government’s forthcoming digital fiat, cryptocurrencies and e-payment platforms all competing for business.

Graña added that the BCU is “monitoring and assessing how cryptocurrencies fare in the banking and wholesale payment sectors,” and wants to see how blockchain-powered financial networks perform during times of economic turmoil.

The BCU first unveiled its digital fiat intentions in 2017, and has been conducting pilot projects at a number of locations in recent months.

Cryptocurrency trading has seemingly boomed in South America of late, with a number of conventional fiats struggling. Venezuela’s government earlier this month introduced a crypto-calculator app that allows citizens to make real-time crypto-to-fiat price calculations, as the nation actively pushes crypto pay as an alternative to the bolivar and the United States dollar.