Former president of Uruguay’s National Drugs Board, Leonardo Costa, has warned the Banco Republica Del Uruguay (BROU) it must be “more proactive” in providing financial services to the cannabis industry, otherwise, bitcoin will step in to take its place. As with the United States, Uruguay’s legitimate marijuana industry has struggled with accessing banking and financial services.
Also Read: Indospace Allows Cannabis Merchants to Accept Bitcoin Effortlessly
Costa Is Concerned That If BROU Fails to Offer Financial Services to the Cannabis Industry, That the Industry Will Be Forced to Adopt Bitcoin
Attorney Leonardo Costa has told local media that Banco República del Uruguay must be “more proactive” in ensuring that the actors within the legitimate cannabis industry are able to access financial services. “It is a public policy that can not fail because of this,” the former president of Uruguay’s National Drugs Board stated.
Costa is concerned that if BROU fails to offer financial services to the cannabis industry, that the industry will be forced to adopt bitcoin as its principal medium of circulation. “Bitcoin is a way of circumventing these problems that, in some countries, are being the alternative for cannabis businesses, or businesses of this type, “he stated.
“The Republic Bank Must Assume [It’s] National Banking Role” – Leonardo Costa, Former President of Uruguay’s National Drugs Board
Uruguay media has recently reported the closure of bank accounts associated with cannabis dispensaries and producers on the part of private banks. The BROU has not yet stated an official position regarding the marijuana industry – although it is rumored that the bank will make a decision in coming weeks.
Leonardo Costa told media that “there are banks that, by disposition of their parent companies, have decided based on a risk analysis, not to work with those substances or businesses that work with those substances.” Costa also suggests that some banks may have legal reservations regarding the marijuana industry, as “money from the marketing of prohibited substances could be considered money laundering since drug trafficking is a precedent of money laundering… [Banks] understand that it is a high-risk environment”.
Costa has articulated his roadmap for ensuring financial inclusion regarding the cannabis industry. “First, that the banking supervisor gives him some legal framework, no doubt. Without that, it is very difficult. Second, there are banks that, like the Republic Bank, must assume their national banking role… if none of that happens, this will end in bitcoins. Do not doubt it.”
Do you think that if Uruguay’s national bank fails to facilitate financial inclusion for the cannabis industry, cryptocurrencies will step in? Share your thoughts in the comments section below!
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