New Crypto Law in Uruguay Raises Alarm Over NFT and Token Classification Risks

• Uruguay’s Blockchain Chamber warns crypto regulations could harm startups through unclear rules and disproportionate financial compliance burdens.

• The draft PSAV law introduces broad definitions that may classify NFTs and utility tokens as financial assets, raising costs.

The Blockchain Chamber of Uruguay expressed concern over the draft regulation for Virtual Asset Service Providers (PSAV), describing it as ambiguous and restrictive. The institution warned that the proposed framework could generate legal uncertainty, raise operational costs, and discourage technological development in the crypto sector.

According to the Chamber, the rule’s language lacks clarity and introduces disproportionate requirements that could limit the activity of small companies and independent developers. The document argues that local entrepreneurs require precise and fair rules, but the text relies heavily on analogies that leave room for interpretation. The short public consultation period further complicates technical analysis and prevents a comprehensive evaluation of the legal and economic impact.

The Chamber also pointed out that the definition of financial virtual assets is too broad. It could include utility tokens and non-fungible tokens that do not serve a financial purpose. This wide interpretation might impose compliance duties on projects that are not directly related to financial operations, affecting their sustainability and future growth.

Continuing with reports on Uruguay in CryptoNewsFlash, the proposal establishes a single authorization scheme for all PSAVs without differentiating between business sizes or transaction volumes. According to the Chamber, such uniformity may make small firms economically unviable. The institution suggests a gradual regulatory approach similar to Uruguay’s payment system model, where requirements scale as companies grow.

The Chamber criticized the absence of a regulatory sandbox—a mechanism that would allow startups to test projects under controlled conditions. Without it, entrepreneurs face greater legal exposure and limited opportunity for experimentation.

Experts like financial analyst Juan Diana Romero agree that, while the regulation aims to bring order to the crypto market, its ambiguous definitions may lead to interpretive conflicts. The debate in Uruguay remains open as the crypto sector calls for more precise and adaptable legislation.