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Legal regulation of operations with cryptocurrencies in Latin America

Published:
June 26, 2018

Regulation of operations with cryptocurrencies in Latin America has been popular for a long time. Three years ago, the report of the State Treasury showed an increase in such transactions in the amount of 510%. The most impressive growth was recorded in 2016 – $ 50 billion.

The prospect of business development using digital money is primarily connected with the unstable political and economic situation in a lot of countries. For leading experts, this indicator looked questionable, because the crisis often stops the development of innovation, business, etc. In Latin America, the number of Internet users is less than in other developed countries, but almost all of them successfully practice electronic costs.

The development of the cryptocurrency used popular social networks Facebook, Twitter and WhatsApp. Argentina and Brazil set records for visiting social networks. Over the past three years, Latin Americans have demonstrated their desire for freedom, web technologies and electronic payments.

HISTORY OF DEVELOPMENT OF CRYPTOCURRENCY BUSINESS

The interest about Bitcoin arose due to the steady position of the President of Argentina, Mauricio Macri, who was interested in the development of a new financial direction, and holding the post of a measure of Buenos Aires, and held the first Bitcoin-Forum in Latin America. Following Makri, local politicians became interested in cryptocurrency, which brought operations with digital money to a new level.

We propose to more detailed examine the state of the cryptocurrency business in every country in Latin America.

Venezuela is a state that in 2016 the International Monetary Fund predicted an inflation rate of over 700%, in 2017 the figure reached 1600%. Inflation has raised the popularity of Bitcoin, so the number of transactions has increased.

The popular platform LocalBitcoins, making cryptocurrency transactions, for the first time reached a figure of 14.2 million dollars. The number of users of electronic money in 2015 compared to 2014 was more than 100%. Despite such popularity in Venezuela, Bitcoin is considered private property, and not a monetary unit.

Argentina is a leader in development of the digital currency market. The Central Bank reported about possible risks of developing the cryptocurrency market as early as 2014. However, in 2014, Buenos Aires stated the one of the first city in which one of the world’s most famous Bitex.la exchanges started operating.

In 2015, President Mauricio Macri came to power, who was not afraid of innovation in his actions. The policy of the state helped stabilize firms that work with digital money. In 2016, Uber signed an agreement with Xapo, which allowed paying for taxi services using Bitcoin.

The legislation of Argentina does not recognize the cryptocurrency as a national currency, but this does not prevent it from perceiving it as cash. Thus, the Civil code allows to consider digital money as a commodity.

Unfortunately, not all Latin American countries have made such a breakthrough in the development of the cryptocurrency business. The Brazilian Federal Tax Service to adjust the taxation of transactions involving digital currencies equates electronic money to financial assets.

The Colombian Central Bank officially stated that digital money cannot be a legal tender. In Bolivia and Ecuador, operations with cryptocurrency are strictly prohibited by the current legislation. The governments of the above-mentioned countries are not ready to take measures for the development of the cryptocurrency business in the territory of their states.

Eternity Law International will help regulate companies involved in activities related to cryptocurrencies in Latin America. Call to find out the details of the process.

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