Cryptocurrencies may be the solution to financial and economic problems in some Latin American countries, but legislation in the region has yet to advance. This was the experts’ assessment in the panel Advanced Thinking: Cryptocurrency Regulations in LatAm. The debate was part of the last day of SiGMA Americas, an event about iGaming, a category that includes games that go from poker to sports betting.
“Crypto is really a magical solution to the monetary and economic problems we see today in some Latin American countries like Argentina and Venezuela”, said Etienne Luquet, CEO of Legal Lab. That’s because, as Luquet recalls, these countries have a number of financial constraints.
However, in order for cryptocurrencies accomplish all these potentials, they must be legal in these countries. And, in this area, there are still issues to be solved. Jose Antonio Lanz Diaz, journalist and editor of Decrypt Media, cites Brazil as an example.
In Latin America, cryptocurrencies legislation is divided into 3 groups
“Brazil and Argentina are also trying (to regulate cryptocurrencies ). But they are focusing not on the token itself, but on transactions. On how people do the transactions, and not on the crypto universe”, he explained.
According to Diaz’s assessment, fraud in the financial system increases fears around crypto and represents a hindrance to the advancement of the law. For this reason, he divides the situation of Latin American countries into three groups. One is the group of nations in which cryptocurrencies are legal, there is provision in the law allowing its use. In the second group, they are illegal, that is, the law prohibits them. The third is a kind of gray area, which he calls in between legal and unlegal areas. In these countries, “technically, it is not prohibited (to use crypto), but you do not know what the authorities will do” in case of use, he evaluates. However, the number of countries where crypto is illegal has been falling: “Now, only Bolivia forbids the use (of cryptocurrencies) in general”, explains the expert.
Mexico allows use, but with restrictions
Mexico, on the other hand, despite having approved regulations on the subject in 2018, is considered by Luquet as a grey area. This is because in 2019, the Mexican central bank decided that only institutions could use cryptocurrencies. And that these transactions could only be internal or between institutions, thus making use by individuals impossible. But since there are many exchanges with headquarters abroad, Mexicans resort to them for their operations. Meanwhile, lawyers try to circumvent the limitations.
“One of the main arguments is that bitcoin and other cryptocurrencies are code, so they can’t be treated as assets, money or even digital assets. This can be considered in all purposes, be it tax, commercial, etc.”, Luquet explains.
The expectation of the LegalLab executive is that one of these cases reaches the Mexican Supreme Court, and the decision can throw new light on the subject.