Key takeaways
Latin American countries regulating crypto are taking diverse approaches, from legal adoption to complete restrictions.
Cryptocurrency tax policy in South America varies widely, with some nations taxing capital gains up to 30%.
Argentina, Brazil and Mexico are shaping crypto trends while updating laws to match growing adoption.
New rules like the Travel Rule and VASP licensing are reshaping how crypto firms operate across borders.
Cryptocurrency regulations in Latin America are evolving rapidly as the region experiences one of the world’s fastest-growing crypto booms.
Countries such as Brazil, Argentina and Mexico have become global crypto hotspots driven by inflation, limited banking access and strong real-world demand. In 2024, Argentina overtook Brazil in estimated crypto inflows totaling $91 billion, beating the global average by 17%, making it one of the fastest-growing cryptocurrency markets globally, according to Chainalysis.
But as adoption accelerates, regulation is catching up. From everyday use of stablecoins to cross-border payments, the need for clear legal frameworks is rising, especially with the Travel Rule reshaping how crypto firms operate across borders.
Cryptocurrency regulations in Latin America (by country)
Latin American countries demonstrate a wide range of cryptocurrency regulation strategies, ranging from complete bans to proactive government-supported programs. These variations show how each country views state control, economic stability and financial innovation.
This article breaks down crypto adoption laws in Latin America into four distinct categories to better understand the region’s regulatory direction in 2025.
Latin American countries proactively embracing crypto
El Salvador
El Salvador pioneered Bitcoin (BTC) as a legal tender in 2021 but rescinded that status in January 2025 under pressure from the International Monetary Fund. Despite this reversal, the nation is still promoting cryptocurrency through voluntary acceptance, legal changes and initiatives to increase infrastructure and trust. As of July 2025, El Salvador’s Bitcoin reserves are estimated to be over $456 million of unrealized profit. Capital gains on Bitcoin transactions aren’t taxed under its original law.
Brazil
Brazil recognizes crypto as a payment method and promotes innovation under a licensing law for virtual asset service providers (VASPs), though full regulations from the central bank are still pending. In 2025, Brazil imposed taxes on all crypto capital gains, replacing its progressive model and removing exemptions. Previously, small investors could trade up to 35,000 Brazilian reais per month tax-free, while larger gains were taxed in tiers; now, all profits are taxed at a flat 17.5%.
Panama
After the supreme court overturned its 2022 crypto bill, Panama introduced a new draft law in 2025 to regulate digital assets and blockchain services. The bill legally recognizes Bitcoin, Ether (ETH) and stablecoins as valid payment methods and proposes a licensing regime for VASPs.
The bill also allows crypto payments for municipal taxes and public services in Panama City. It also enforces Know Your Customer (KYC) and Anti-Money Laundering (AML) standards and aims to position Panama as a regional fintech hub. Crypto gains are subject to income tax under standard tax laws, which range from 0% to 25% depending on the income.
Latin American countries with a progressive approach toward crypto
Paraguay
Paraguay allows crypto payments and mining under a 2022 law that mandates registration and AML compliance. A partnership with El Salvador is set to further strengthen regulatory oversight. Paraguay is becoming an increasingly attractive hub for crypto mining and innovation thanks to abundant, low-cost hydroelectric power from the Itaipu Dam.
Mexico
Under the 2018 Fintech Law, crypto is classified as a virtual asset. In Mexico, banks and fintechs need a license for crypto services, but non-bank VASPs can operate legally by reporting to the financial intelligence unit (UIF) and tax authority (SAT). Crypto income is taxed under general rules: 30%-35% income tax and 16% VAT for certain operations, plus a 10% capital gains tax.
Peru
As of June 2025, Peru requires all VASPs to register with the Financial Intelligence Unit (UIF) and comply with AML and KYC rules. The new Financial Action Task Force Travel Rule will become enforceable in Peru in August 2026.
Peru treats crypto as an intangible, movable asset. Gains from trading are taxed as capital income for individuals between 8% and 30% depending on income and 29.5% for companies, with VAT exemption and the financial transaction tax applying to crypto-to-fiat transfers.
Colombia
Colombia has taken a friendly stance toward crypto, launching a regulatory sandbox in 2021 and publishing AML and tax guidelines; though the sandbox expired in December 2023, no comprehensive crypto law has been passed yet.
Despite the legislative delay, major players like Bancolombia have launched the Wenia crypto exchange and a stablecoin, COPW, signaling institutional support. Crypto is subject to income tax, with capital gains or crypto business activities taxed under existing personal or corporate income frameworks.
Costa Rica
The Central Bank of Costa Rica neither regulates nor bans crypto, acknowledging it as a legal means of payment while warning users to proceed at their own risk. Crypto is considered intangible property with no specific regulations beyond transaction taxes. Gains from crypto trading are currently taxed as income.
Uruguay
In October 2024, Uruguay passed AML legislation for the crypto sector, placing oversight under the country’s central bank. Local investors can now legally transact in crypto, while businesses have access to a defined licensing process. In Uruguay, crypto-related income is subject to existing tax laws, with capital gains tax under personal or corporate income regimes depending on the activity.
Chile
Cryptocurrency use is unrestricted in Chile, lacking a statutory or regulatory framework. A proposal was introduced in 2021 that would recognize cryptocurrencies as legal payment methods. As of June 2025, no Chilean bank offers cryptocurrency services, and no licensed crypto entity has been established. Profits from cryptocurrency sales are deemed taxable income.
Guatemala
While crypto is not legally recognized in Guatemala as of July 2025, a draft bill introduced in May 2025 promotes voluntary crypto payments, mandates registration of exchanges and crypto wallets with the Superintendence of Banks (SIB) and supports innovation for financial inclusion. The bill proposes tax exemptions for personal crypto transactions and savings, while commercial crypto operations would be taxed.
Latin American countries with a cautious approach toward crypto
Argentina
In Argentina, crypto is legal, but since 2023, banking restrictions have limited its use by banning payment providers from crypto transactions to reduce exposure in the payment system. The securities regulator CNV finalized VASP rules in March 2025. Crypto is taxed as assets, with capital gains up to 15% plus income tax on business and mining activities.
Nicaragua
In April 2025, Nicaragua introduced a new fintech regulation replacing its 2022 framework, establishing mandatory licensing for Payment Service Providers and VASPs under the central bank. Crypto is not explicitly taxed under separate laws, but transactions involving digital assets are generally subject to existing income or commercial tax rules.
Bolivia
After a decade-long crypto ban, Bolivia lifted restrictions in June 2024, allowing transactions through regulated electronic channels and enabling limited use by state companies for international trade.
The new policy permits crypto use under strict oversight from the central bank and financial authorities. Bolivia has no dedicated crypto tax framework yet, but general income tax laws may apply to gains from crypto transactions.
Latin American countries with restrictive measures toward crypto
Honduras
The National Banking and Securities Commission banned all financial institutions from holding, investing in or transacting with cryptocurrencies as of February 2024, citing risks such as fraud, money laundering and lack of regulation. While crypto exchanges and special zones like Próspera or Bitcoin Valley still operate, the broader financial sector remains barred.
Ecuador
The country relaxed its 2014 Bitcoin ban in 2018 but maintains a cautious stance. Crypto trading is legal, but digital assets are not recognized as legal tender and cannot be used for payments.
In 2024, the central bank reiterated that crypto payments remain prohibited, warning users against speculation and fraud. General income tax rules may apply to crypto-related profits.
Venezuela
In 2018, Venezuela introduced the Petro, a government-backed cryptocurrency intended to get around US sanctions, but it failed to gain traction. To oversee the cryptocurrency industry, Venezuela formed Sunacrip in 2019. However, due to a significant corruption scandal, the office was briefly closed in 2023 before reopening in 2024.
To safeguard the national power grid, the government outlawed cryptocurrency mining. In addition, Venezuela has enforced stringent regulations requiring mining and exchange licenses, and since 2022, it has levied taxes of 2%-20% on cryptocurrency transactions.
Notable cryptocurrency regulations in Caribbean countries
Beyond its white sand beaches and tourism, the Caribbean is emerging as an undiscovered center for crypto innovation. Several nations are adopting digital assets as tools for foreign investment and economic expansion.
The Bahamas was one of the first to introduce a central bank digital currency (CBDC), the Sand Dollar, and also set the standard with its Digital Assets and Registered Exchanges (DARE) Act.
The British Virgin Islands and Antigua and Barbuda both have detailed regulations and licensing requirements for crypto companies.
Other Caribbean nations act more conservatively. Though Jamaica has introduced its version of a CBDC, it cautions citizens about private cryptocurrencies.
St. Kitts and Nevis accepts crypto as proof of funds for citizenship programs but doesn’t treat it as regular money. Countries like St. Lucia and Barbados regulate crypto under general financial laws, especially around exchanges and service providers.
In 2021, Cuba acknowledged crypto as a means of payment, regulating via the central bank to set virtual asset service provider licensing rules.
The Dominican Republic allows crypto but doesn’t regulate it, with the central bank warning that digital assets are not legal tender and advising financial institutions to proceed at their own risk.
While other nations, such as Trinidad and Tobago, do not outright prohibit cryptocurrency, they caution citizens about its dangers, including volatility and scams.
The majority of Caribbean countries do not yet have crypto taxes, while standard capital gains regulations sometimes apply. Overall, the region is moving toward clearer regulation, with the Bahamas and Cayman Islands leading the way.
The future of cryptocurrency adoption in Latin America
The adoption of cryptocurrencies in Latin America tends to be based more on practical demands than enthusiasm. Stablecoins and Bitcoin are becoming useful tools for transmitting and saving money due to inflation, restricted banking access and remittance fees.
While local banks like Brazil’s BTG Pactual are developing blockchain-based solutions to stay competitive, big companies and exchanges are expanding their regional footprint. Laws governing the adoption of cryptocurrencies in Latin America will probably evolve to encourage safer, more regulated use as fintechs and established companies adjust.