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Argentina Drops Proposal to Legalize Crypto Holdings Amidst Ambitious Reforms

The Argentine government, under the leadership of President Javier Milei, has made a significant change to its ambitious package of reforms, dropping the option to legalize crypto holdings for individuals who have overdue tax declarations.

This decision was reported by Argentine tech-focused outlet iProUP on January 27th, as part of the Law of Bases and Starting Points for the Freedom of Argentines, an extensive legislative package aimed at advancing Milei’s policy agenda.

The clause that has been removed from the bill pertained to asset regularization, proposing a one-time tax on various previously undeclared assets, including cryptocurrencies, real estate, personal property, stocks, and securities.

The proposed tax rates were 5% for assets declared by the end of March 2024, 10% from April to the end of June 2024, and 15% from July to the end of September.

The decision to eliminate the asset regularization component from the bill was made by the Minister of the Interior, Guillermo Francos, who cited concerns that it would delay the treatment of the broader legislative initiative in parliament.

This change comes after earlier promises in December 2023 by the government, including the possibility of allowing Bitcoin’s use in the country through a decree, which has yet to materialize.

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Interestingly, the “Bases for the Reconstruction of the Argentine Economy” decree passed in December 2023 included provisions allowing debtors to pay in currencies “not recognized as legal tender” in Argentina, hinting at potential support for cryptocurrencies.

Javier Milei won the 2023 presidential election in Argentina, addressing the country’s persistent and rising inflation.

He had previously expressed positive sentiments about Bitcoin, considering it a move toward returning monetary control to the private sector.

However, since taking office in December 2023, he has not publicly addressed digital assets.

In January, Milei pledged not to legally oppose provincial authorities’ efforts to create local currencies, responding to the Governor of La Rioja province’s announcement of a separate currency after Milei devalued the Argentine peso by 50% upon assuming office.

This decision reflects a broader stance on allowing local autonomy in monetary policy.

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