The U.S. SEC announced last week a regulation on so-called “emerging technologies” that includes both digital currencies and artificial intelligence. Countries like Brazil, Mexico, or Chile already have advanced legislation on cryptocurrencies, but AI is being addressed separately.
What do cryptocurrencies have to do with AI? If we read the SEC‘s statement, U.S. authorities seem concerned with fraud prevention as well as promoting the technology sector.
Brazil, a Pioneer in Cryptoasset Regulation, in the Midst of AI Debate
The National Congress of Brazil is currently debating AI legislation, seeking to balance innovation and the protection of fundamental rights. In December 2024, a bill was passed that proposes a regulatory framework and whose main mission is to protect the intellectual property of creators. On the other hand, cryptoasset regulation has been in place for several years; the first law was passed in 2022 and defines virtual assets as a regulated category. The Central Bank must take on the role of regulatory body, ensuring greater oversight of exchanges and transactions. However, the market is still waiting for secondary measures to clarify aspects such as regulatory compliance and investor security. Brazil is the country with the highest adoption of cryptoassets in Latin America, a sector growing in e-commerce, remittances, and cross-border payments. Traditional Brazilian banks have started offering digital asset services.
Chile and Its National Center for Artificial Intelligence
The case of Chile is somewhat similar to that of Brazil: cryptocurrency regulation dates back to 2022, and parliament is currently debating artificial intelligence. However, the Andean country already has a slight advantage as since 2021 it has had a National Center for Artificial Intelligence (CENIA). The Chilean regulation on digital assets—or Fintech Law—defines a cryptoasset as “a digital representation of units of value, goods, or services, with the exception of money, whether in national currency or foreign exchange, which can be transferred, stored, or exchanged digitally.” The Comisión para el Mercado Financiero (CMF) is responsible for regulating the sector.
The Chilean government published its first national AI policy in 2021. Since then, the country has created CENIA, promoted AI-focused PhD scholarships through the National Agency for Research and Development (ANID), launched 5G networks, developed the first AI doctorate in Chile and Latin America, and implemented the Ethical Algorithms Project, among other initiatives. This policy remains in effect, and according to the institutional portal of the Chilean Ministry of Science, it is anchored in three pillars: enabling factors, development and adoption, and governance and ethics. These definitions resulted from a participatory process conducted in 2019 and 2020. More recently, in May 2024, the government took another step and presented a bill aimed at regulating and promoting the development of this technology. This initiative is still in its first constitutional process in the Chamber of Deputies at the time of this report.
Mexico Awaits the AI Debate
In Mexico, the Fintech Law recognizes cryptocurrencies as digital assets and allows their use as a payment method within the financial system. It also regulates electronic payments, crowdfunding, and digital assets. There are two types of ITFs (Financial Technology Institutions): crowdfunding institutions and electronic payment fund institutions (digital wallets). The law defines virtual assets (cryptocurrencies) as “the representation of value recorded electronically and used among the public as a means of payment for all types of legal acts, whose transfer can only be carried out through electronic means.” The Bank of Mexico (Banxico) supervises processes, and Banxico must authorize virtual assets before ITFs and other financial entities can use them. Regarding AI, there is no regulation in the Mexican financial system.
The Situation in Uruguay and Argentina
In Uruguay, the first Virtual Assets Law was passed in 2024. The regulation equates cryptoassets with securities, meaning they are now under the regulatory framework of the Central Bank of Uruguay (BCU).
In Argentina, before the Milei scandal, there was great anticipation regarding the regulation of digital assets, with a law expected to be approved this year. The South American country ranks second in the region in stablecoin adoption (cryptocurrencies pegged to a fiat currency, in this case, the U.S. dollar) and has a highly developed industry with major projects ahead. Amid a tense political climate, in the coming months, we will see how the discussion progresses in a country that had aspired to regional leadership in the field.
