Argentina’s Central Bank (BCRA) said last Thursday that the country’s financial sector will no longer be allowed to provide services related to digital assets that are not regulated. This actually causes all crypto transactions, such as bitcoin (BTC), to be banned within the official economy.
Although inflation is higher than ever, Argentina is holding its ground on the measures. The reason cryptocurrencies are banned seems to be a appointment with the International Monetary Fund (IMF).
IMF wants Argentina to reject bitcoin
The country has finally decided to discourage the use of cryptocurrencies after the International Monetary Fund approved a $45 billion loan. A month after the country received this loan, they came up with the ban.
The agreement states that the country must discourage the use of cryptocurrencies in order to protect its financial sector. The letter from the IMF states:
†To further ensure financial stability, we are taking important steps to discourage the use of crypto currencies for the purpose of preventing money laundering, informality and disintermediation”, to strengthen the country’s financial resilience.†
The BCRA has indicated that cryptocurrencies could potentially be used to launder money or finance terrorism. They also indicated that cryptocurrencies are not traceable and are therefore ideal for dealing in drugs, weapons or prostitution.
Money laundering with crypto is rare
However, this shows dates from Chainalysis, a blockchain analysis agency, is not entirely true. This data shows that only 0.05% of all transactions in 2021 were used for money laundering. This means that $33 billion has been laundered since 2017. If we compare this with fiat, we see that this is nothing. The United Nations Office on Drugs and Crime estimates that about $800 billion to $2 trillion is laundered annually with fiat, which is roughly equivalent to 5% of the world’s gross domestic product.