coininsider.com
The Central Bank of Argentina has prohibited financial payment services and providers from offering cryptocurrency transactions. According to the bank, the ban is part of a plan to reduce the exposure of digital assets to the payments system in the country.
A statement from the central bank states that payment providers are not allowed to offer cryptocurrency services through their platforms or applications. This also includes fintech companies and financial firms, limiting the crypto transactions in the country. As per the Bank of Argentina:
“Payment service providers that offer payment accounts (PSPCP) will not be able to carry out or provide their customers with operations with digital assets, including cryptoassets, that are not regulated by the competent national authority and authorised by the Central Bank of the Argentine Republic (BCRA).”
The statement continues to state that any interested people or cryptocurrency users “must carry out the operations on their own.”
📍Invitamos al BCRA a revisar esta medida y a trabajar en conjunto con la Cámara Argentina Fintech y otros actores relevantes del sistema para establecer un marco que permita el desarrollo responsable y sostenible de la industria cripto en Argentina.
— Cámara Argentina Fintech (@CamaraFintechAr) May 5, 2023
The regulation and new ruling do not clarify how companies within the cryptocurrency industry will be impacted. The fintech chamber of Argentina is not behind the decision and is urging the national authority to reverse the decision. According to the innovative branch, it is placing a significant limit on “a technology that offers multiple benefits and opportunities for our society.”
Crypto regulation in Argentina historically
Over the past few years, the Argentinian government has taken a fairly dynamic stance on cryptocurrency. In 2014, it warned users of cryptocurrency about the risk of digital assets. This was followed by a positive stance taken in 2017, where the government acknowledged the benefits that blockchain and cryptocurrencies can offer the economy.
In May 2019, the Central Bank issued a new set of regulations that set out regulations for cryptocurrency exchanges. The legislation required exchanges to register with the Financial Information Unit (FIU) in order to comply with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations. In March 2021, the government also announced that it would be implementing a new regulatory framework for the cryptocurrency industry. This would include the creation of a new regulatory body, the National Office of Virtual Assets (NOVA), which would oversee and regulate cryptocurrency trading and transactions.
The regulations that were set in place were to encourage the use of crypto. However, the latest decision takes a step back for the industry and innovation and reduces the ease that Argentinians can transact amidst an ongoing economic crisis in the country.