Argentina’s Central Bank Bans Crypto Trading

  • Unregulated cryptocurrency trading is a risk to investors and the financial system, says Central Bank
  • Pressure from the IMF, after a recent debt restructuring agreement, may have influenced this decision.

The central bank of Argentina has decided to ban unregulated crypto transactions at traditional banks. Once considered a crypto-friendly country, the pendulum has swung on Argentina after the International Monetary Fund (IMF) reportedly put pressure on policymakers. This announcement comes just days after Argentina’s largest private bank, Banco Galicia, decided to add crypto trading.

“Financial institutions cannot carry out transactions or facilitate transactions to their clients in the trade of digital assets, including crypto assets and those whose income is determined by the fluctuation of the value of cryptocurrencies,” the Central Bank of the Argentine Republic said in a statement. release. published statement Thursday. This represents a real ban, because there are currently no regulated digital assets in the country.

The regulator said its actions are designed to “mitigate the risks associated with” cryptocurrencies, both for investors and for “the entire financial system.” Argentina’s central bank acknowledges that banks should focus their efforts on financing the real economy rather than digital assets. In addition, it implies that these transactions would involve non-regulated entities established outside of Argentina, which could violate current laws.

The action follows an alert in May 2021, during which authorities highlighted the risks of crypto assets and advised investors to be “cautious” in their investment decisions. These risks include “high volatility, cyberattacks, money laundering and terrorist financing” as well as breaches in transnational foreign exchange transactions, the central bank said.

Last week, Banco Galicia and digital bank Brubank SAU revealed that they were offering digital asset trading services, including major cryptocurrencies such as bitcoin, ether, and stablecoin USDC. Until now, Argentines had to use centralized exchanges through wallets or trade directly through over-the-counter exchanges.

In 2017, Argentina received a $44 billion bailout from the IMF, the largest aid package in history. The institution recently approved a debt restructuring agreement and, jointly, both parties agreed that Argentina “will discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation,” according to a letter of intent sent in March. by politicians to the managing director of the IMF, Kristalina Georgieva. The stated goal was to “further safeguard financial stability.”

The country has been dealing with high inflation and the devaluation of its currency, the peso, for years. Argentina’s monthly inflation rate rose to 6.7% in March alone, beating forecasts, according to the latest country data. The annualized inflation rate reached 55.1% that month, reaching the highest level in two decades due to increases in food and energy prices.

Locals, in turn, began investing in cryptocurrencies to protect their savings from declining purchasing power, and employers were allowed to pay up to 20% of an employee’s salary in cryptocurrencies. However, the latest decision made by the central bank may reverse the trend towards mainstream crypto adoption in the country.

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  • Tiago Varzim


    freelance reporter

    Tiago Varzim is a Portugal-based journalist who covers macroeconomics, financial markets, and digital assets in the European Union. He works for the main financial newspapers in Portugal. Tiago graduated from the Escola Superior de Comunicação Social in Lisbon with a degree in journalism.