Argentina’s central bank bans payment providers from offering crypto transactions

On May 4, Argentina’s central bank banned payment providers from offering crypto transactions, aiming to reduce the payment system’s exposure to digital assets.

Crypto services may no longer be offered

The monetary authority has declared that payment providers are no longer allowed to offer or facilitate crypto services through their applications. This brings payment fintechs and financial institutions under the same regulations in the country.

The Authority stated the following: “Payment service providers offering payment accounts are not allowed to conduct or facilitate operations with digital assets, including crypto-assets, that are not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic.”

Since cryptocurrencies are not (at least not yet) regulated in Argentina, all coins and tokens are subject to this decision. It is possible that cryptos will be regulated in Argentina in the future.

However, it is still unclear what impact this measure will have on the local crypto industry. Have local media reported that payment providers would not comment on the decision.

Argentina’s fintech chamber has urged the government to reconsider the decision, stating that “it restricts access to a technology that offers multiple benefits and opportunities for our society.”

Hyperinflation drives crypto adoption

Cryptocurrency adoption in Argentina is boosted by hyperinflation. In April, Bitcoin’s price reached an all-time high in the Argentine peso (ARS), with BTC’s exchange rate surpassing ARS 6.59 million, representing an increase of more than 100% year-to-date.

Read Also:  Bitcoin Miners Boosted by New Protocol

Data from the National Bureau of Statistics shows that inflation increased by 104.3% year on year in March, after rising 102.5% in the previous month.

Bitcoin’s popularity in the country also stems from the ongoing devaluation of the Argentine peso, which has fallen nearly 50% against the US dollar over the past year.

Stablecoins also popular in Argentina

Even some Argentine cities seem to be looking to cryptocurrencies for a safe haven amid the ongoing economic crisis.

In December of last year, the Argentine province of San Luis approved the issuance of its own stablecoin, which is pegged to the US dollar and available to all residents. The stablecoin is 100% backed by liquid financial assets.

According to Chainalysis, more than 30% of consumers in Argentina use stablecoins for everyday purchases, most likely for small retail transactions below $1,000/€892.

Recent Articles

Related News

Leave A Reply

Please enter your comment!
Please enter your name here