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Argentina bans banks from offering crypto services

Argentina bans banks from offering crypto services

Argentina’s central bank has banned operations that allow bank clients to purchase crypto just two days after Banco Galicia, Argentina’s largest private bank, and digital bank Brubank announced they would allow their customers to purchase crypto.

The move from Argentina’s central bank effectively bans lenders from providing crypto services, and comes a month after the controversial agreement between the IMF and Argentina’s central bank involving the refinancing of a $45 bn loan that specifies that Argentina discourage the use of cryptocurrencies.

Following Thursday’s announcement, banks in the country will no longer be allowed to offer digital currencies, that are unregulated, with an official government statement outlining Argentina’s stance:

“Financial entities may not carry out or facilitate their clients to carry out operations with digital assets, including crypto assets and those whose yields are determined based on the variations that they register, that are not regulated by national authority and authorized by the Bank. Central Bank of the Argentine Republic (BCRA)”

The deal between Argentina and the IMF follows a loan that was acquired by the previous government of Mauricio Macri in 2018, of which  the country was due to  pay back $19bn in 2022 and $20bn in 2023. 

In the official statement, the central bank further highlights the risks posed to the country with regards to digital currencies, citing risks for users and the financial institution as a whole:

“Its high volatility, the risks associated with operational disruptions and cyberattacks, money laundering/financing of terrorism and potential non-compliance with exchange regulations, the absence of safeguards and complete information that current regulations provide for users of financial services and the cross-border nature of operations.”

“The measure ordered by the BCRA's board of directors seeks to mitigate the risks associated with transactions with these assets that could be generated for users of financial services and for the financial system as a whole,”

The influence of the IMF upon Argentina’s cryptocurrency usage has been made evident by the decision by the central bank to halt cryptocurrency offerings. Critics of the agreement between the IMF and Argentina will have further reason to question Argentina’s stance against cryptocurrency.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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