Central Bank of Argentina bans banks from trading cryptocurrencies with customers

Charlie Taylor

The Central Bank of Argentina said in a statement published on Thursday night (5) that financial institutions in the country are prohibited from both carrying out and facilitating operations with cryptocurrencies. According to the entity, digital currencies with blockchain registration have not been authorized for use. The move was taken two days after Argentina’s largest private bank announced that it would start allowing its customers to buy and sell cryptocurrencies. Banco Galicia was offering four different cryptocurrencies — bitcoin (BTC), ether (ETH), USD Coin (USDC) and XRP — to its customers. “Financial entities will not be able to make or facilitate transactions with digital assets, including cryptocurrencies, that are not regulated by a national authority or authorized by the Central Bank,” he said. According to the bank, the measure seeks to reduce the risks associated with operations with these assets. The statement recalls that in May 2021, the BC of Argentina and the National Securities Commission had already published a warning about the risks of transacting with cryptocurrencies. “Some cases of risks associated with this type of operation were mentioned: the high rate of volatility, the risk of operational problems and hacker attacks, money laundering to finance terrorism”, recalled the Central Bank. One reason cryptocurrencies are popular in Argentina is because the country has one of the highest inflation rates in the world — in the last twelve months, inflation is 55%, according to the Argentine central bank website.

Operations at Banco Galicia

On Tuesday (3), Banco Galicia, the largest private bank in Argentina, based in the capital Buenos Aires, began offering four different cryptocurrencies — bitcoin (BTC), ether (ETH), USD Coin (USDC) and XRP. — to your customers. On Monday (2), screenshots of the purchase options were posted on Twitter by customers of the bank and then Banco Galicia confirmed to Decrypt via email that it had added these services. “Banco Galicia launches a new innovative service for its customers, offering the purchase, sale and custody of cryptocurrencies from [forma] simple, safe and in one place”, explained the bank. Banco Galicia’s Twitter account also answered their customers, confirming the new service: “Yes, we are adding new investment options”.

Obligations for brokers

In March of that year, the Buenos Aires Times published a story stating that Argentina would include cryptocurrency companies in its anti-money laundering (AML) regulatory regime, according to an article by The Argentine Financial Information Unit ( or UIF, for its Spanish acronym) is the country’s competent authority when it comes to regulating money laundering risks, and is now reportedly working to add crypto companies to the list of entities subject to anti-money laundering reporting requirements. cash. According to a person with “direct knowledge of the issue”, the plan is for these new regulations to take effect this year. If these directives are passed, it will significantly change the way cryptocurrency companies interact with regulators in Argentina. At this time, these companies reportedly comply with tax reporting regulations implemented in 2019.

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