Regulatory Convergence in Latin America: Three Jurisdictions, Three Approaches, One Shared Goal

Regulatory Convergence in Latin America: Three Jurisdictions, Three Approaches, One Shared Goal

Hook

Latin America faces a unique challenge: creating regulatory frameworks for digital assets without stifling innovation. In 2024-2025, Argentina, El Salvador, and Uruguay have developed three distinct approaches to crypto regulation, stablecoins, and decentralized finance, each reflecting the economic and political needs of its context. According to regulatory data, these jurisdictions represent live laboratories of normative experimentation that are informing hemispheric standards.

What You'll Learn

• Divergent regulatory approaches: How Argentina (traditional securities oversight), El Salvador (Bitcoin as legal tender), and Uruguay (progressive framework with regulatory sandbox) create radically different ecosystems.
• Stablecoin regulation: Collateralization requirements, authorized issuers, reserve transparency, and how each jurisdiction balances consumer protection with technological innovation.
• Tokenization framework: How traditional assets (securities, sovereign debt, real estate) move on-chain, requiring legal clarity on ownership, collateral, and settlement.
• Decentralized finance (DeFi) challenges: Why regulating smart contracts and non-custodial platforms differs from regulating traditional financial institutions, and emerging solutions.
• Regional harmonization: Initiatives like ASEA (South American Alliance of Digital Asset Standards) working toward compatible regulations without single-authority imposition.
• Proportionate regulation: Principle of allowing smaller platforms with fewer requirements while strengthening standards for systemically important actors.

Session Summary

Argentina: Traditional Securities Oversight with Digital Innovation - Roberto Silva from the National Securities Commission (CNV) presented Argentina's approach, where crypto-assets are considered "digital securities" under CNV supervision. According to 2024 data, Argentina has authorized 47 crypto platforms under this framework. The central challenge is distinguishing between assets requiring investor supervision versus pure payment infrastructure. Silva emphasized that regulation should not chase technology, but rather clearly define what constitutes a stablecoin, which require 1:1 reserves, and which permit yield farming. Argentina's strategy prioritizes legal certainty over approval speed.

El Salvador: Radical Adoption as State Policy - Juan Carlos Reyes from El Salvador's Integration and Data Administration Authority (CNAD) described the adoption of Bitcoin as legal tender. Unlike Argentina and Uruguay, El Salvador took an explicit pro-crypto position, viewing Bitcoin as a solution to fiscal volatility and remittance dependence. The legal framework allows Bitcoin transactions without capital gains taxes, attracting mining and innovation. However, Reyes acknowledged challenges: limited financial education, Bitcoin volatility complicating its role as stable money, and incomplete integration with traditional payment systems.

Uruguay: Regulatory Sandbox and Proportionality - Nicolás de Marco from Uruguay's Central Bank (BCU) presented Uruguay's regulatory sandbox, allowing startups to operate under experimental rules for 2-3 years before full regulation. Uruguay emphasizes responsible innovation: startups can test new business models without full regulatory burden, but under supervision. The BCU maintains close bilateral relationships with each innovator, enabling iterative feedback. According to 2024 BCU data, 34 startups operate under sandbox, with 18 graduated to standard regulation. This approach balances consumer protection with experimentation.

Asset Tokenization: Unified Use Case - All three panelists agreed that tokenization of securities, sovereign bonds, and real estate is the use case unifying their frameworks. When a sovereign bond is tokenized, it requires: (1) regulated custodian, (2) audited smart contract, (3) DVP settlement standard, (4) clarity on applicable law. Argentina, El Salvador, and Uruguay each are developing tokenization-specific sandboxes, anticipating 24/7 regional capital flows without traditional intermediaries.

Regional Harmonization and International Standards - Reyes highlighted initiatives like ASEA, where regional regulators share best practices without forcing homogeneity. The principle is: different approaches (securities vs currency vs infrastructure) can coexist as long as legal clarity exists. Silva added that real convergence will come from AML/CFT (anti-money laundering) requirements, where Latin America already has FATF frameworks to adapt to crypto. De Marco emphasized that proportionality—smaller startups with lighter requirements—enables healthy ecosystems without suffocating early-stage innovation.

Watch the Full Panel

Recording available on YouTube - MERGE Madrid 2025: Panel of regulators from Argentina (CNV), El Salvador (CNAD), and Uruguay (BCU) discussing regulatory convergence in Latin America.

Frequently Asked Questions

Can a startup operate across multiple Latin American jurisdictions under a single framework?
Currently, no single "passport" exists. A platform must comply with each country's regulations where it operates. However, initiatives like ASEA seek to create regulatory equivalence: if a company meets Argentine solvency and AML standards, other countries would recognize that certification. This will take 2-3 years according to De Marco.

What's the key difference between stablecoin regulation in Argentina versus El Salvador?
In Argentina, 1:1 dollar-backed stablecoins require CNV authorization and segregated deposits. In El Salvador, Bitcoin (highly volatile) was chosen as official currency, not a stablecoin. Uruguay allows both under sandbox with supervised testing. The framework differentiates assets by volatility: lower volatility = more regulation; higher volatility = less regulation but greater risk disclosure.

How soon will we see sovereign bond tokenization in Latin America?
Silva indicated Argentina is 18-24 months from sovereign bond tokenization pilot in sandbox. Initial volume will be small (USD 50-100M) but would demonstrate feasibility. Reyes noted El Salvador, focused on Bitcoin, will likely tokenize bonds on Bitcoin Layer 2s before Ethereum. De Marco said Uruguay could be the first country to complete the full cycle of issuance, trading, and on-chain settlement of sovereign bonds in 2025-2026.