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Bloomberg Línea — While many cryptocurrency market players, either on the business side or as users, are usually reluctant to any regulatory proposals, the number of companies that consider it necessary to have a regulatory framework that sets the rules is growing. And even more so after the collapse of US exchange platform FTX in 2022, which left thousands affected globally.
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In this context, both executives of companies with a presence in Latin America and state regulators gave their views on the current state of the rules of the game in the region at an event called Modular, organized by crypto exchange Ripio, in Buenos Aires.
The companies’ view
“Before, I thought it was better not to regulate, but today I believe that a basic regulatory framework can provide guarantees”, said Marcelo Cavazzoli, founder and CEO of Lemon Cash, a crypto company with presence in Argentina, Mexico, Peru, Colombia, Uruguay and Ecuador.
In the same vein, Cavazzoli added that “it is very difficult to build a company if you don’t know if it could be closed down tomorrow”.
On the same panel was Juan José Mendez, chief brand officer of Ripio, a cryptocurrency platform with a presence in Brazil, Uruguay, Colombia, Chile, Mexico and the United States, who echoed: “We want an intelligent regulation”.
However, Manuel Beaudroit, CEO and founder of Belo, a company with a presence in 13 countries in the Americas, expressed his reservations about the benefits of a regulatory framework. “The current lack of regulation in Argentina is conducive to innovation. If what comes is a regulation that does not promote innovation and competition, it is like shooting yourself in the foot,” he said.
Later, in a panel that included mainly regulators, Brazili’s Bernardo Srur, CEO of ABCripto, an entity made up of companies from the crypto and blockchain ecosystem in Brazil, highlighted that in his country President Luiz Inácio Lula da Silva has backed a law that regulates the crypto ecosystem.
“We have in Brazil a very favorable situation, as regulators are being very positive about the crypto economy,” Srur said. “We have a decree from the president regulating the cryptoassets law and we have the Brazilian Central Bank as one of our main regulators, and both see the market in a very positive way,” he added.
In addition, he considered that the Comissão de Valores Mobiliários (CMV), the country’s stock market regulatory body, recognizes that the crypto economy can help popularize the capitals market in Brazil.
“The regulator knows how to distinguish and there is great concern in the country so that cases like FTX do not occur. We are not restricting the market, we are looking for it to develop,” he said. On the other hand, he expressed his optimism, underscoring that, in the last year, 12 million people carried out transactions with crypto assets in Brazil, that is, 6% of the population.
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The regulators’ view
On the panel on which Srur was present, there were also representatives from different regulatory bodies in Argentina.
In Argentina, the central bank has repeatedly expressed its negative view of cryptocurrencies and has made it known in different communiqués. However, within the framework of the event, the regulators tried to show themselves as friendly and open to the growth, with a regulatory framework, of the crypto ecosystem.
“Our main interest is that there is business, that the market grows, but with segregation and prevention of money laundering”, assured the head of Argentina’s National Securities Commission (CNV), Sebastián Negri.
In line with this view, the director of supervision of Argentina’s Financial Information Unit (UIF), Elio Grillo, assured that the agency he represents does not want to “stifle” or “suffocate” the crypto business, but rather “tackle money laundering”. But, when questioned, Grillo denied that the crypto sector implies greater risks in terms of money laundering than other sectors of the financial industry.
The Argentine regulators referred to the need to establish a regulatory framework that complies with international rules, and pointed out the importance of cooperation among countries. “It may happen to Uruguay that there are Argentine companies operating there, and I want to help the authorities to have effective supervision mechanisms over them”.
The head of regulation of the central bank of Uruguay, Patricia Tudisco, was also on the panel, and said that, “if there is something that characterizes this type of assets, it is that they are no longer local problems, but global problems, because the market is global. It is very important to be all aligned on the same principles, so as not to generate arbitrage, because that would be very bad for everyone”.
In line with this, Tudisco said that, “more than ever, cooperation will be necessary to regulate these markets”.
The Uruguayan official joked about the need for a regulatory framework for the market to develop, saying “we are a necessary evil” and added: “Whenever there is regulation there is more certainty and a door to go and knock on in the event of any problem”.
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