Uruguay expands steps for fintech regulation

By Pittaluga Abogados

In line with a global trend, startups focused on financial products and services continue to grow in Uruguay. The fintech sector is made up of more than 60 national and foreign companies that operate under the Free Trade Zone regime. They work mainly in five segments: development of technological products for financial institutions; loans; payments and remittances; wealth management services; and crowdfunding and cybersecurity.

Although they promote an innovative spirit and facilitate services to consumers, fintech companies generate possible risks to the financial system such us illicit activities, cyberattacks and fraud, causes of concern that had pushed the Central Bank of Uruguay (BCU) to regulate the sector since 2018, starting with the regulation of crowdfunding and peer-to-peer lending.

The BCU has recently presented a roadmap for 2022 with an eye on open banking, announcing that the government will look to promote an “appropriate regulatory framework" that allows the exchange of data between financial institutions, with high security standards and fair distribution of operating costs.