Argentine Central Bank prohibits offering cryptocurrency services

Argentina's central bank, the BCRA, has announced that financial institutions they cannot let their clients carry out operations with digital assets. Among those digital files are cryptocurrencies. This decision comes just days after two banks said they had opened up cryptocurrency trading to their customers.

Earlier in the week, Banco Galicia, the largest Argentine private bank by market value, added the option to buy and sell cryptocurrencies on its platform. Shortly after, the national digital bank Brubank followed, offering its customers the option to buy popular crypto assets such as Bitcoin, Ether, USD Coin and Ripple.

Banks cannot allow the purchase of cryptocurrencies in Argentina

The BCRA statement says that banks are prohibited from offering services for any digital assets that are not regulated by the central bank. Currently, there are no such regulated digital assets, making the measure equivalent to an outright ban for all practical purposes. The statement also highlights the fact that the ban includes assets whose profitability is determined by the fluctuations of cryptocurrencies.

The central bank of Argentina has defined those digital assets as a digital representation of value or rights that are transferred and stored electronically using distributed ledger technology or other similar technology. This encompasses any asset on a digital blockchain, and includes cryptocurrencies and NFTs. The measure ordered by the Board of Directors of the BCRA hopes to mitigate the risks associated with operations with these assets to protect users of non-regulated financial services.

Central bank of Argentina blockchain solution RSK

Argentines are adopting cryptocurrencies at a higher than average rate. This is because recurrent currency crises and inflation exceed 50 percent per year and thereby reduce users' savings. By converting their savings into cryptocurrencies, they have their savings in a currency that does not depend on the economy of Argentina. Something similar happened with Russian migrants after the invasion of Ukraine, who invested in cryptocurrencies for fear that their savings in rubles would not be recognized. Argentina is among the top 10 in the world for cryptocurrency adoption, according to blockchain analytics firm Chainalysis.

In March of this year, the Argentine government signaled that it would discourage the use of cryptocurrencies as part of a nearly $45.000 billion debt restructuring deal with the International Monetary Fund. On March 3, they warned that measures would be taken in the hope of preventing money laundering, the black economy and the avoidance of essential intermediaries.

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Benjamin Rosa

Madrileño whose publishing career began in 2009. I love investigating curiosities that I later bring to you, readers, in articles. I studied photography, a skill that I use to create humorous photomontages.

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