Even as cryptocurrencies become more widespread and authorities around the world seek ways to incorporate them into their countries’ operations, Argentina’s central bank has gone the opposite way and banned the institutions under its wings from offering crypto assets.
Indeed, the Banco Central de la República Argentina (BCRA) has issued an order prohibiting financial entities from carrying out or facilitating for their clients the operations involving digital assets, the authority announced on its website on May 5.
Reasons behind the ban
According to the BCRA:
“The measure ordered by the Board of Directors of the BCRA seeks to mitigate the risks associated with operations with these assets that could be generated for users of financial services and for the financial system as a whole.”
As the central bank explained, “the activity of financial entities must be aimed at financing investment, production, marketing, consumption of goods and services required by both domestic demand and export.”
On the other hand, it states that the problem with cryptocurrencies is that:
“The different actors involved in the operations with these assets may not be established in the country, which could generate departures from the general regulations.”
It needs to be mentioned that in May 2021, the BCRA and the National Securities Commission (Comisión Nacional de Valores or CNV), issued a public statement warning about the possible implications and risks that crypto assets may entail, as well as recommending a “prudent attitude in order to mitigate an eventual source of vulnerability for users and investors.”
The recent move comes nine months after the Argentinian president Alberto Fernández cautiously expressed his support for Bitcoin, although at the same time he acknowledged the skepticism over the asset’s unfamiliarity, as Finbold reported.
Interestingly, Argentina has around 14 Bitcoin (BTC) ATMs where users can buy or sell the flagship digital asset, but they’re mostly centered in Buenos Aires, according to the latest information acquired from Coin ATM Radar.