Argentina’s top bank says financial institutions cannot deal in cryptocurrencies or digital assets powered by blockchain technology
The directive comes a few days after two major banks announced their crypto services
The Central Bank of Argentina issued a directive to local money houses restricting such institutions from carrying out cryptocurrency transactions or offering digital asset services to investors.
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 the national authority and authorized by the Central Bank of the Argentine Republic (BCRA).
According to the official statement, Banco Central De La Republic Argentina (BCRA) believes that cryptocurrencies pose a risk to the country’s traditional financial system. BCRA cited concerns pertaining to high volatility, money laundering, terror financing, cybercrimes, and non-compliance with regulatory frameworks to name a few.
Argentina’s apex bank previously expressed similar rhetoric in May 2021. At the time, the central bank along with the National Securities Commission (CNV) warned the public against investing in the speculative market of cryptos.
In the process, the top bank also provided its definition of virtual assets as any digital representation of value or rights that can be stored or transferred by leveraging blockchain technology.
Furthermore, the BCRA supposedly held consultations with the International Monetary Fund regarding a multi-billion deal geared toward addressing Argentina’s growing debt situation. As part of the deal, authorities said a legislative framework could be developed to limit the adoption of cryptocurrencies in the country.
The latest directive from the Central Bank of Argentina comes a few days after two of the biggest private financial institutions, Banco Galicia and Brubank, announced plans to provide investors and account holders with digital asset trading facilities.
As of press time, it remains unclear how these two banks will proceed with their crypto investment offerings.
Central Banks Around The Globe Frown On Cryptocurrency
Despite the massive growth and adoption rate of digital assets over the past two to three years, a plethora of central financial governing bodies remain opposed to the blockchain-based digital economy.
Top banks in Russia and India have reportedly proposed nationwide bans for Bitcoin and cryptos in the past.