The Current State of Crypto Regulation In LatAm

With 33 countries, over 660 million people, and a combined GDP of over $5.8 trillion, Latin America has emerged as a major player in the crypto industry. In this article, we will look at the diverse crypto regulation environment in Latin America, as well as their immigration laws. Latin American countries are known for their relatively easy immigration procedures for foreigners. Latin American Countries With Crypto Laws in 2024 According to my information, only Honduras has banned the use of crypto in 2024. In all other countries, it is either permissible, recognized as legal tender, or the law is silent about it. Let us take a deep dive into some of the most significant countries when it comes to crypto regulation in LATAM. Argentina At the moment, probably the most popular country on the continent for permanent relocation is Argentina, where it is quite easy to obtain citizenship by naturalization after living in the country for 2 years. According to a recent Forbes report, there are an estimated 5 million Argentinians who hold crypto. The country has emerged as a giant when it comes to crypto ownership in Latin America and is ranked 15th overall, according to the Global Crypto Adoption Index by Chainalysis. A major driver of crypto adoption in Argentina is runaway inflation, which hit a peak of 211% in 2023. Coupled with strict government monetary controls that limit Argentinian’s access to foreign currencies at $200 a month, it has left citizens with no alternative but to use crypto. Since the election of President Milei, Argentina’s stance toward crypto has changed greatly. The president has made various policy reforms that include the integration of crypto into the economic framework that makes crypto acceptable in contract payments. Argentina has one of the most developed procedures for regulating cryptocurrencies. There is a federal law regulating VASPs and their registration procedure. In 2023, licensing procedures were adopted, and in 2024, companies began to actively register. There are already 101 companies in the Argentine VASP registry. Brazil Brazil has been another major player in the crypto sector. It is currently Latin America’s largest crypto market and is ranked 9th overall. During the 2022-2023 bear market, Brazilians continued to adopt crypto, with the number of registered crypto users rising about 4.1 million. Brazil, the largest economy of the region, accounts for roughly half the population and half the GDP of the entire region. No wonder it attracts foreigners! The foundations of cryptocurrency regulation here were laid at the end of 2022 when a federal law was passed by the country's parliament. Brazil was the first country worldwide to adopt crypto ETFs, with the first one, HASH 11, launched by Hashdex in 2021. At the time, it was the most purchased futures on the country’s stock exchange. In 2023, Brazil passed a law to regulate the crypto sector, and in 2024, the president signed a decree giving the Brazil Securities And Exchange Commission, the central bank, power to regulate the crypto industry. There is also a bill in the Brazilian Congress that aims to make Bitcoin legal tender in the country. Additionally, the country is working to finalize a crypto regulatory framework. The foundations of cryptocurrency regulation here were laid at the end of 2022 when a federal law was passed by the country's parliament. The law prescribes the need to license VASPs, but the country's Central Bank has yet to adopt all the necessary regulatory rules for this law (promised in 2024). There is still no VASP registry in the country, and Crypto exchanges can operate without a license. This is likely to change in 2025. El Salvador El Salvador has some of the most crypto-friendly laws in all of Latin America. In 2021, the country passed its Bitcoin Law, making it the first country worldwide to recognize Bitcoin as legal tender officially. The country aims to become a financial hub for the crypto sector. As part of this effort, they introduced the investor visa program called the Freedom Visa. Its goal is to attract entrepreneurs in the crypto sector into the country. Paraguay Paraguay has not been able to adopt a federal law on crypto for the third year. In fact (although there is no information about this on the Internet in English), cryptocurrencies have been legal there since 2020 - then the local financial intelligence agency SERPELAD introduced AML requirements for crypto companies. Mining is also very popular in the country, both legal and illegal, and there is a surplus of electricity. That is why senators tried to ban any crypto business in 2024. But their law did not pass. However, electricity tariffs for legal miners will increase. Mexico Mexico did not change its regulations in 2024. The old rules adopted in 2021 under the fintech law remain in effect. The law requires banks and fintechs to obtain a license for crypto transactions. However, ordinary VASPs (not banks) can legally operate in the country without a license; they only need to send reports to the country's financial intelligence unit (UIF) and tax authorities (SAT). A total of 53 legal entities sent such reports to the UIF in 2024. Also by law, crypto providers must send reports on all transactions over 70k pesos (about $3,400). The number of such transactions more than quadrupled in 2024. In general, both in terms of relocation and launching a crypto business, regulation in Argentina, Mexico, and Brazil - the three biggest Latin American countries are lax. But you also have to take into account that there are quite high taxes and restrictions on withdrawing capital from the country, which is not always good for business. In Mexico, under the country’s tax laws, each crypto transfer attracts an income tax of 30% to 35%, a 16% VAT for transfers within Mexico, but 0% for buyers outside Mexico. Additionally, there is a 10% tax on capital gains. Chile Chile passed its Fintech Law in 2023, whose goal is to promote financial inclusion and competition. It seeks to promote innovation through technology. The law regulates certain aspects of the crypto sector, such as custody and the exchange of crypto. However, it does not pronounce itself on other aspects like borrowing and staking. Currently, there is no bank in Chile that supports crypto services. And also still there is no licensed crypto entity. Colombia Colombia’s government has adopted a friendly approach to the crypto sector. In 2021, it established a regulatory sandbox for the sector and has also published anti-money laundering and crypto tax guidelines for players in the sector. The sandbox expired in December 2023. Since the sandbox expired, Colombia has not been able to pass any law regulating crypto, although Finance Minister Ricardo Bonillo made such a promise to the whole world at the Davos Forum. However, this did not stop a large local bank, BancoColombia, from launching its crypto exchange and crypto card, Wenia, in May 2024. This means that although the adoption of legislation is delayed, no one is going to ban crypto in Colombia. 6 million residents (11.5%) use crypto. Costa Rica While the central bank does not regulate crypto, it acknowledges its existence as a legal method of payment. A bill has been introduced in Congress to regulate the crypto sector. The bill proposes that there is no tax for using crypto to buy goods. Additionally, crypto in cold storage would not be taxed, nor would crypto from mining activities. However, profits from crypto trading would be taxed. Cuba Cuba passed resolution 215 in 2021, allowing Cuban businesses to accept crypto once they get authorization via a one-year permit. Shortly after, Trump introduced new sanctions on Cuba, stating that the country could use crypto to circumvent sanctions. Ecuador Ecuador recognizes the buying and selling of crypto online. However, it does not acknowledge the use of crypto as legal tender. In 2024, the Central Bank of Ecuador reminded citizens that crypto payments are prohibited in the country. Despite this, there is a very high demand for crypto in the country; more than 30% of the population wants to buy cryptocurrencies. This is the highest figure in the region. Colombia is in second place. Uruguay Uruguay finally adopted AML legislation on crypto in October 2024. The bill hands control of the crypto sector to the country’s central bank. For this progressive country in terms of financial and tax legislation, the lack of regulation on crypto was a big omission. Now, finally, local crypto investors will be able to legally conduct transactions, and businesses have received a clear licensing procedure. Venezuela Venezuela passed the Sunacrip in 2019, which is an office that regulates crypto in the country. However, it shut down in 2023 after a corruption scandal and reopened in 2024. Venezuela has clear laws on mining, requiring a license to mine crypto, or start an exchange. In 2022, a bill was passed that taxes any crypto not backed by the government at 2% to 20%. Peru Peru's financial intelligence service has finally officially formulated requirements for crypto companies in 2024. Almost a year and a half has passed since the adoption of the law, according to which such requirements were supposed to appear in 2022, and now, every crypto company in the country must have AML policies and a compliance officer. Also, the court of the commercial register of Peru at the end of this year allowed companies to keep cryptocurrencies on their balance sheets. Nicaragua In Nicaragua, there is no specific bill regulating the crypto sector. However, crypto transactions fall under the purview of its anti-money laundering (AML) laws. LATAM Countries With Pending Or No Regulation These countries have some type of pending regulation or no regulation for the crypto sector. Bolivia In 2024, the crypto ban in Bolivia was canceled. The Bank of Bolivia (BCB) has issued Board Resolution No. 082/2024, which allows the use of Electronic Payment Instruments (IEP) for transactions related to virtual assets. As for now, there is still no specific regulation for crypto companies, but the cancelation of the crypto ban is a really positive initiative. Also, the resolution of BCB (11) contains paragraphs dedicated to AML regulation of crypto, which looks like an intention to provide standard registration procedures for VASPs in the near future. Ecuador This year, the Central Bank of Ecuador reminded everyone that crypto payments are prohibited in the country. Despite this, there is a very high demand for crypto in the country - more than 30% of the population wants to buy cryptocurrencies. This is the highest figure in the region. Colombia is in second place. Panama Panama introduced a crypto bill in 2021. The bill was approved after a third debate in 2022. However, in January 2023, the Supreme Court turned down the bill, stating that it violated the Constitution. Haiti Haiti, which is undergoing major civil strife, has no specific laws regulating the crypto sector. Guatemala In Guatemala, there is no specific regulation from the crypto sector. Additionally, crypto is not legally recognized, and crypto investors enjoy no protection under the law. Dominican Republic Like Guatemala, the Dominican Republic has no legal protection for crypto investors. The country’s central bank stated in 2021 emphasizing this fact. Countries That Have Banned Crypto In Latin America These countries have issued official bans on the use of crypto within their borders. According to our information, after Bolivia lifted the ban on cryptocurrencies in June 2024, Honduras remains the only Latin American country where cryptocurrencies are illegal. The country's Central Bank reminded us of this with its resolution in 2024. Honduras In February of 2024, Honduras’ central bank issued a ban on crypto, alleging a high risk of money laundering and fraud. After Bolivia lifted the ban on cryptocurrencies in June 2024, Honduras remains the only Latin American country where cryptocurrencies are illegal. The country's Central Bank reminded us of this with its resolution in 2024. Conclusion In Latin America, countries fall into three categories: those that have banned crypto, those with no or pending regulation, and those with crypto-friendly regulation. In general, most of Latin America has a positive stance on the crypto sector. With the widespread use of crypto in the region, it is likely most countries could adopt some form of crypto regulation by the end of the decade. 2024 has been a positive year for cryptocurrency regulation in Latin America. In fact, there is not a single major country in the region where cryptocurrencies are prohibited. Although the adoption of cryptocurrency laws in LatAm is slow, now, a resident of any country in the region, except Honduras, can legally own cryptocurrency. With 33 countries, over 660 million people, and a combined GDP of over $5.8 trillion, Latin America has emerged as a major player in the crypto industry. In this article, we will look at the diverse crypto regulation environment in Latin America, as well as their immigration laws. Latin American countries are known for their relatively easy immigration procedures for foreigners. Latin American Countries With Crypto Laws in 2024 Latin American Countries With Crypto Laws in 2024 According to my information, only Honduras has banned the use of crypto in 2024. In all other countries, it is either permissible, recognized as legal tender, or the law is silent about it. Let us take a deep dive into some of the most significant countries when it comes to crypto regulation in LATAM. Argentina Argentina At the moment, probably the most popular country on the continent for permanent relocation is Argentina, where it is quite easy to obtain citizenship by naturalization after living in the country for 2 years. According to a recent Forbes report, there are an estimated 5 million Argentinians who hold crypto. The country has emerged as a giant when it comes to crypto ownership in Latin America and is ranked 15th overall, according to the Global Crypto Adoption Index by Chainalysis . Chainalysis Chainalysis A major driver of crypto adoption in Argentina is runaway inflation, which hit a peak of 211% in 2023. Coupled with strict government monetary controls that limit Argentinian’s access to foreign currencies at $200 a month, it has left citizens with no alternative but to use crypto. Since the election of President Milei, Argentina’s stance toward crypto has changed greatly. The president has made various policy reforms that include the integration of crypto into the economic framework that makes crypto acceptable in contract payments. Argentina has one of the most developed procedures for regulating cryptocurrencies. There is a federal law regulating VASPs and their registration procedure. In 2023, licensing procedures were adopted, and in 2024, companies began to actively register. There are already 101 companies in the Argentine VASP registry. Brazil Brazil Brazil has been another major player in the crypto sector. It is currently Latin America’s largest crypto market and is ranked 9th overall. During the 2022-2023 bear market, Brazilians continued to adopt crypto, with the number of registered crypto users rising about 4.1 million. Brazil, the largest economy of the region, accounts for roughly half the population and half the GDP of the entire region. No wonder it attracts foreigners! The foundations of cryptocurrency regulation here were laid at the end of 2022 when a federal law was passed by the country's parliament. Brazil was the first country worldwide to adopt crypto ETFs, with the first one, HASH 11, launched by Hashdex in 2021. At the time, it was the most purchased futures on the country’s stock exchange. In 2023, Brazil passed a law to regulate the crypto sector, and in 2024, the president signed a decree giving the Brazil Securities And Exchange Commission, the central bank, power to regulate the crypto industry. There is also a bill in the Brazilian Congress that aims to make Bitcoin legal tender in the country. Additionally, the country is working to finalize a crypto regulatory framework. The foundations of cryptocurrency regulation here were laid at the end of 2022 when a federal law was passed by the country's parliament. The law prescribes the need to license VASPs, but the country's Central Bank has yet to adopt all the necessary regulatory rules for this law (promised in 2024). There is still no VASP registry in the country, and Crypto exchanges can operate without a license. This is likely to change in 2025. El Salvador El Salvador has some of the most crypto-friendly laws in all of Latin America. In 2021, the country passed its Bitcoin Law, making it the first country worldwide to recognize Bitcoin as legal tender officially. The country aims to become a financial hub for the crypto sector. As part of this effort, they introduced the investor visa program called the Freedom Visa. Its goal is to attract entrepreneurs in the crypto sector into the country. Paraguay Paraguay Paraguay has not been able to adopt a federal law on crypto for the third year. In fact (although there is no information about this on the Internet in English), cryptocurrencies have been legal there since 2020 - then the local financial intelligence agency SERPELAD introduced AML requirements for crypto companies. Mining is also very popular in the country, both legal and illegal, and there is a surplus of electricity. That is why senators tried to ban any crypto business in 2024. But their law did not pass. However, electricity tariffs for legal miners will increase. Mexico Mexico did not change its regulations in 2024. The old rules adopted in 2021 under the fintech law remain in effect. The law requires banks and fintechs to obtain a license for crypto transactions. However, ordinary VASPs (not banks) can legally operate in the country without a license; they only need to send reports to the country's financial intelligence unit (UIF) and tax authorities (SAT). A total of 53 legal entities sent such reports to the UIF in 2024. Also by law, crypto providers must send reports on all transactions over 70k pesos (about $3,400). The number of such transactions more than quadrupled in 2024. In general, both in terms of relocation and launching a crypto business, regulation in Argentina, Mexico, and Brazil - the three biggest Latin American countries are lax. But you also have to take into account that there are quite high taxes and restrictions on withdrawing capital from the country, which is not always good for business. In Mexico, under the country’s tax laws, each crypto transfer attracts an income tax of 30% to 35%, a 16% VAT for transfers within Mexico, but 0% for buyers outside Mexico. Additionally, there is a 10% tax on capital gains. Chile Chile passed its Fintech Law in 2023, whose goal is to promote financial inclusion and competition. It seeks to promote innovation through technology. The law regulates certain aspects of the crypto sector, such as custody and the exchange of crypto. However, it does not pronounce itself on other aspects like borrowing and staking. Currently, there is no bank in Chile that supports crypto services. And also still there is no licensed crypto entity. Colombia Colombia’s government has adopted a friendly approach to the crypto sector. In 2021, it established a regulatory sandbox for the sector and has also published anti-money laundering and crypto tax guidelines for players in the sector. The sandbox expired in December 2023. Since the sandbox expired, Colombia has not been able to pass any law regulating crypto, although Finance Minister Ricardo Bonillo made such a promise to the whole world at the Davos Forum. However, this did not stop a large local bank, BancoColombia, from launching its crypto exchange and crypto card, Wenia, in May 2024. This means that although the adoption of legislation is delayed, no one is going to ban crypto in Colombia. 6 million residents (11.5%) use crypto. Costa Rica While the central bank does not regulate crypto, it acknowledges its existence as a legal method of payment. A bill has been introduced in Congress to regulate the crypto sector. The bill proposes that there is no tax for using crypto to buy goods. Additionally, crypto in cold storage would not be taxed, nor would crypto from mining activities. However, profits from crypto trading would be taxed. Cuba Cuba passed resolution 215 in 2021, allowing Cuban businesses to accept crypto once they get authorization via a one-year permit. Shortly after, Trump introduced new sanctions on Cuba, stating that the country could use crypto to circumvent sanctions. Ecuador Ecuador recognizes the buying and selling of crypto online. However, it does not acknowledge the use of crypto as legal tender. In 2024, the Central Bank of Ecuador reminded citizens that crypto payments are prohibited in the country. Despite this, there is a very high demand for crypto in the country; more than 30% of the population wants to buy cryptocurrencies. This is the highest figure in the region. Colombia is in second place. Uruguay Uruguay finally adopted AML legislation on crypto in October 2024. The bill hands control of the crypto sector to the country’s central bank. For this progressive country in terms of financial and tax legislation, the lack of regulation on crypto was a big omission. Now, finally, local crypto investors will be able to legally conduct transactions, and businesses have received a clear licensing procedure. Venezuela Venezuela passed the Sunacrip in 2019, which is an office that regulates crypto in the country. However, it shut down in 2023 after a corruption scandal and reopened in 2024. Venezuela has clear laws on mining, requiring a license to mine crypto, or start an exchange. In 2022, a bill was passed that taxes any crypto not backed by the government at 2% to 20%. Peru Peru's financial intelligence service has finally officially formulated requirements for crypto companies in 2024. Almost a year and a half has passed since the adoption of the law, according to which such requirements were supposed to appear in 2022, and now, every crypto company in the country must have AML policies and a compliance officer. Also, the court of the commercial register of Peru at the end of this year allowed companies to keep cryptocurrencies on their balance sheets. Nicaragua In Nicaragua, there is no specific bill regulating the crypto sector. However, crypto transactions fall under the purview of its anti-money laundering (AML) laws. LATAM Countries With Pending Or No Regulation These countries have some type of pending regulation or no regulation for the crypto sector. Bolivia In 2024, the crypto ban in Bolivia was canceled. The Bank of Bolivia (BCB) has issued Board Resolution No. 082/2024, which allows the use of Electronic Payment Instruments (IEP) for transactions related to virtual assets. As for now, there is still no specific regulation for crypto companies, but the cancelation of the crypto ban is a really positive initiative. Also, the resolution of BCB (11) contains paragraphs dedicated to AML regulation of crypto, which looks like an intention to provide standard registration procedures for VASPs in the near future. issued resolution of BCB Ecuador This year, the Central Bank of Ecuador reminded everyone that crypto payments are prohibited in the country. Despite this, there is a very high demand for crypto in the country - more than 30% of the population wants to buy cryptocurrencies. This is the highest figure in the region. Colombia is in second place. Panama Panama introduced a crypto bill in 2021. The bill was approved after a third debate in 2022. However, in January 2023, the Supreme Court turned down the bill, stating that it violated the Constitution. Haiti Haiti, which is undergoing major civil strife, has no specific laws regulating the crypto sector. Guatemala In Guatemala, there is no specific regulation from the crypto sector. Additionally, crypto is not legally recognized, and crypto investors enjoy no protection under the law. Dominican Republic Like Guatemala, the Dominican Republic has no legal protection for crypto investors. The country’s central bank stated in 2021 emphasizing this fact. Countries That Have Banned Crypto In Latin America These countries have issued official bans on the use of crypto within their borders. According to our information, after Bolivia lifted the ban on cryptocurrencies in June 2024, Honduras remains the only Latin American country where cryptocurrencies are illegal. The country's Central Bank reminded us of this with its resolution in 2024. Honduras In February of 2024, Honduras’ central bank issued a ban on crypto , alleging a high risk of money laundering and fraud. After Bolivia lifted the ban on cryptocurrencies in June 2024, Honduras remains the only Latin American country where cryptocurrencies are illegal. The country's Central Bank reminded us of this with its resolution in 2024. ban on crypto ban on crypto Conclusion In Latin America, countries fall into three categories: those that have banned crypto, those with no or pending regulation, and those with crypto-friendly regulation. In general, most of Latin America has a positive stance on the crypto sector. With the widespread use of crypto in the region, it is likely most countries could adopt some form of crypto regulation by the end of the decade. 2024 has been a positive year for cryptocurrency regulation in Latin America. In fact, there is not a single major country in the region where cryptocurrencies are prohibited. Although the adoption of cryptocurrency laws in LatAm is slow, now, a resident of any country in the region, except Honduras, can legally own cryptocurrency.