Argentina’s central bank has taken measures to restrict the exposure of the country’s payment system to digital assets by prohibiting payment providers from offering or facilitating crypto transactions. The monetary authority’s statement indicates that payment fintech and financial institutions will be subject to the same regulations in the country.
The central bank has explicitly stated that payment service providers offering payment accounts may not conduct or assist in operations involving unregulated digital assets, including cryptocurrencies. As cryptocurrencies currently lack regulation in Argentina, all coins and tokens are affected by this decision.
Impact on local crypto industry and calls for reconsideration
The repercussions of this measure on Argentina’s local crypto industry remain uncertain, with payment providers reportedly declining to comment on the matter. Argentina’s fintech chamber has urged the government to rethink its decision, arguing that it restricts access to a technology that provides numerous benefits and opportunities for society.
It now means that major platforms, including Mercado Libre, Latin America’s answer to Amazon, will no longer be able to offer Argentinians Bitcoin buying services.
Argentina—Latin America’s third-largest economy—right now suffers from one of the worst inflation rates in the world: It soared past 100% last month for the first time in three decades.
Several crypto startups in the country and even one popular presidential candidate have preached using Bitcoin as a savior for ordinary Argentinians who cannot save or are being pushed into poverty because of the peso’s collapse.
Although cryptocurrencies aren’t regulated in the South American nation, they are becoming popular. Blockchain data firm Chainalysis has said Argentina is one of the fastest-growing cryptocurrency markets; last year, it ranked number 13 in its 2022 Global Crypto Adoption Index.
Last year, Buenos Aires, the country’s capital, hosted the major LaBitConf event where several cryptocurrency bigwigs—including MicroStrategy boss Michael Saylor and Ethereum co-founder Vitalik Buterin—spoke about Argentina’s growing role in the crypto ecosystem.