The Central Bank of Argentina banned this Thursday night (5) the offer of crypto-assets, including Bitcoin, by financial institutions in the country. The Argentine BC published a statement entitled “BCRA discourages the offer of crypto-assets by the financial system”, but the body of the text is much more incisive than just a discouragement, and essentially disallows any offer of bitcoin or cryptocurrencies.
“Financial entities cannot perform or facilitate that your customers do operations with digital assetsincluding crypto assets and those whose earnings are determined based on the variations they register, which are not regulated by national authority and authorized by the Central Bank of the Argentine Republic (BCRA).”
The intention of the measure was, according to the BCRA, to mitigate the risks associated with operations with these assets that may be generated for users of financial services and for the financial system as a whole. For the Central Bank of Argentina, financial institutions should focus on financing investment, production, marketing, consumption of goods and services required by both domestic demand and exports, rather than offering cryptocurrencies to customers.
Bitcoin is an alternative for Argentines
The ban on bitcoin supply comes just days after two major Argentine banks announced cryptocurrency trading for customers. One of the country’s largest private banks, Banco Galicia, confirmed the news on May 2. Galicia intended to offer bitcoin, ethereum, XRP and USDC stablecoin.
On the same day, digital bank Brubank was publishing about a similar novelty for its users: trading bitcoin, ethereum and USDC and DAI stablecoins.
If we already have crypto!
It is a feature that is being progressively enabled for all our users. When you have it enabled, you will be able to view it by entering “Inversiones” from the app.— Brubank (@brubankarg) May 2, 2022
Argentines are already familiar with the use of cryptocurrencies, as the number of companies in the country that pay a portion of their employees’ salary in crypto has increased by 340% in the last year. To escape high inflation of more than 50% per year and strict exchange controls, Argentine workers take advantage of receiving bitcoin, ethereum or stablecoins, as we explained in another article. This was not the first time that the Central Bank of the Argentine Republic took a stand against digital currencies. In May of last year, the BCRA and the National Securities Commission (Argentina’s CVM) published an alert with the risks that crypto-assets could entail and recommend a prudent attitude by financial institutions to mitigate a possible source of vulnerability for users. and investors. In that publication, crypto assets were defined as a digital representation of value or rights that are transferred and stored electronically using Distributed Ledger Technology (DLT) or other similar technology (such as blockchain). In addition, some of the risks associated with trading were mentioned: high volatility, risks associated with cyber-attacks, money laundering, terrorist financing and potential non-compliance with foreign exchange regulations, and others.
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