With a population of just over 3 million, the peaceful land of Uruguay often gets overlooked by the rest of the world.
While its neighbours grab all the headlines – leaping from one financial crisis to the next – Uruguay remains stable, open to foreign investment, and with a forward-looking leadership.
As the third-largest exporter of software in the region (first by capita), blockchain in Uruguay has the potential to become big business.
Ever since the late 60s, this small Latin American country has placed high importance on developing its IT sector. This has lead Uruguay to become the third-largest exporter of software in the region, with the main destination being the United States (58,1%).
The population is highly tech-savvy. All children are provided with laptops by the government and have taken at least two years of computer science by the age of 15.
Uruguay is actually the first country in the world to provide free laptops to all public school students and teachers from pre-K to secondary school. Uruguay is Latin America’s most advanced country when it comes to telecommunications, internet penetration, and mobile phone rate at 79.6%. It has one of the fastest download and upload speeds with 100% of schools and universities equipped with fibre-optic internet.
The country is not only forward-thinking and developed when it comes to infrastructure and technology either. Uruguay was the first country in the world to legalise recreational cannabis, and same-sex marriage is also legal here.
Moreover, the Uruguayan government is particularly friendly when it comes to foreign investment. They provide a favourable regulatory framework that promotes the internationalisation of tech firms operating out of Uruguay through 100% income tax exemption.
This makes it an attractive option for tech companies and shows the potential for blockchain in Uruguay. Many software providers now state that blockchain makes up some 40% of their service offering.
The use and purchase of cryptocurrencies is not restricted in Uruguay in any way. The only possible roadblock to blockchain in Uruguay is the fact that the government has yet to clarify its stance on the technology. However, many people in the industry are positive that Uruguay will support favourable regulation.
All the conditions are right to support a burgeoning ecosystem for blockchain in Uruguay. However, many people are still waiting for regulatory clarity to come. Despite that, with such a strong software industry here and a reputation for fiscal leniency, Uruguay continues to attract entrepreneurs from around the world.
Earlier this month, the second edition of the Blockchain Summit Uy took place. The event was small yet significant, attracting around 400 guests including members of the government, regulators, and the President of the Central Bank of Uruguay, as well as key members of the country’s cryptocurrency ecosystem. Conference organiser and CEO of software development firm BlockBear Ignacio Varese said:
“The event aims to promote blockchains and cryptocurrencies and to be the meeting point of the community. We also call on the government and the Central Bank of Uruguay to provide their position regarding this revolutionary technology and thus be able to discuss favourable regulation.”
The region’s most established and important blockchain and Bitcoin conference, LABITConf, will also take place in Montevideo and Punta del Este this December. This conference is expected to draw some of the key figures from the blockchain ecosystem around the world and create more attention and awareness for blockchain in Uruguay.
Recently, blockchain firm Aeternity and the ORT University of Uruguay joined forces to further the education of blockchain in Uruguay.
The partnership between the two sides creates an incubator for anyone wanting to develop a dApp (decentralised application) on the Aeternity blockchain. Aeternity was also one of the sponsors of the Blockchain Summit alongside IBM, NEM, R3, Ripio, and the Central Bank of Uruguay.
The agreement opens up new opportunities for promoting awareness of blockchain in Uruguay. In addition to the exchange of technological knowledge between both institutions, the CIE ORT Aeternity Centre for Innovation in Blockchain will carry out investigation, training, and event organisation and workshops.
Back in July 2018, Uruguay started to finance blockchain projects through both public and private investment. ThalesLab and ANII (the National Agency for Innovation and Research of Uruguay) continue to scout out interesting and innovative blockchain start-ups to support in order to promote blockchain in Uruguay.
The first enterprise selected in the process was a start-up called PowerLedgers, a company that offers blockchain as a service to both businesses and governments.
While there are still undoubtedly more recognised blockchain companies coming out of Argentina and Brazil, Uruguay is putting a lot of groundwork in behind the scenes. And with so much talent and infrastructure ready and waiting, Uruguay, in the words of BlockBear co-founder Varese, “has an enormous potential to be a leader in blockchain technology”.
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