Latin American governments do not generally consider the cryptocurrency mining activity illegal. The region is in a gray area, as only Bolivia and Ecuador prohibit and criminalize the use and mining of cryptocurrencies.
The global economy constantly changes and fluctuates, which relates to the social conditions of each nation and the emergence of technological advances.
That is especially true when dealing with cryptocurrencies and their economic and financial phenomenon. The acceptance of those currencies has increased in finance for businesses, banking entities, and individuals.
The movement, acquisition, and acceptance of cryptocurrencies like Bitcoin (BTC) and Ether (ETH) vary depending on each country. While some Latin American nations welcome the progress in the legislation standardizing the management of crypto assets, others resist it.
How the Cryptocurrency Mining Activity Has Evolved since Is Beginning
Bitcoin mining consists of generating blocks for the network in which miners compete. Miners struggle to solve a crypto puzzle of their current block through a Proof-of-Work (PoW) system after several repetitive attempts.
The computational power that a miner contributes to the overall network allows the system to work in a decentralized way. Once miners have obtained the numerical solution to the crypto puzzle, they transmit it to the other nodes.
In the early days, individuals could mine using a standard CPU to get a block and its rewards frequently. However, technological advances led to the emergence of specialized software adapted to work with graphics cards.
As the cryptocurrency mining process evolved, this alternative financial method has become part of the daily lives of millions of people worldwide. The emergence of wallets and the acceptance of crypto assets by financial institutions has allowed using them to pay for goods or services.
The Legal Situation of Cryptocurrency Mining in Latin America
Latin American governments do not generally consider the cryptocurrency mining activity illegal. While some countries have encouraged using crypto assets, others still work on laws and regulations to control them.
El Salvador is a pioneer in that regard, as its government fully legalized and encouraged the use and mining of cryptocurrencies. In 2021, it became the first country to adopt Bitcoin as a legal tender, which led its financial institutions to include it.
The Venezuelan government has promoted various measures to regularize and control the cryptocurrency industry. Likewise, Argentina does not expressly prohibit using crypto assets, but they still lack legal support.
In that regard, the Central Bank of Cuba allows using cryptocurrencies for commercial transactions throughout the territory. For its part, Panama approved a bill that enables the use of cryptocurrencies as a payment means. Similarly, Mexico enacted in 2018 the Law to Regulate Financial Technology Institutions, known as the FinTech Law.
Bolivia was the first Latin American country that expressly banned the use of cryptocurrencies. Ecuador is in a similar position but has not passed a law against crypto assets.
Latin America is in a gray area since no country strictly prohibits or criminalizes using or mining cryptocurrencies, except for Bolivia and Ecuador.
By Alexander Salazar
