Argentina’s central bank has prohibited payment providers from offering cryptocurrency transactions through their applications in the country and facilitating crypto services. The ban aims to reduce Argentina’s payment-system exposure to digital assets. As per a statement by the monetary authority, payment service providers that offer payment accounts may not conduct operations with unregulated digital assets, including cryptocurrencies that are not authorised by the Central Bank of the Argentine Republic. The country’s fintech chamber has requested the government to reconsider the decision, claiming it limits access to technology that offers numerous benefits and possibilities for society.
In addition to the devaluation of the Argentine peso, hyperinflation is also driving cryptocurrency adoption in Argentina. Bitcoin’s price hit an all-time high in April, reaching over 6.59 million ARS, up over 100% in the year-to-date. The national statistics office data showed that inflation has risen by over 100% annually in the country in recent months. The rise in Bitcoin’s popularity also coincides with the devaluation of the Argentine peso against the US dollar. Over 30% of consumers in Argentina use stablecoins for everyday purchases, especially small retail transactions under $1,000.
The country has not regulated cryptocurrencies, and this means all tokens and coins are now subject to the ban. The impact of the recent decision by the Central Bank of the Argentine Republic on the local cryptocurrency industry is not clear. However, local media has reported that payment providers have declined to comment. This decision puts payments fintechs and financial institutions in the country under the same rules.
Cryptocurrencies offer many benefits and opportunities for society; thus, a reconsideration of the decision is essential. The country’s fintech chamber has called on the bank to review the measure and work with other relevant actors to establish a framework that allows for the responsible and sustainable development of the crypto industry in Argentina.
The ban on cryptocurrencies is not ideal for Argentina, as the country struggles with inflation and devaluation of its currency. The move by the country does not align with other countries in the region, which have accepted digital assets’ potential. In conclusion, it is essential that payment fintechs and financial institutions find a way to work with the local authorities to establish a framework that recognises opportunities and limits risks, thus promoting stable economic growth for the country.
According to https://cointelegraph.com/news/argentina-s-central-bank-halts-cryptocurrencies-from-payment-apps
The material in this article is written on the basis of another article.