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Argentina introduces New Rules for firms offering crypto services

New rules for crypto services in Argentina. A review by a Bitcoin mixer: mixer.money
Argentina introduces New Rules for firms offering crypto services

The Argentine government has initiated the introduction of regulations to allow cryptocurrency exchanges to legally operate in the country. The National Securities Commission (CNV), Argentina’s securities regulator, announced that virtual asset service providers must adhere to the recommendations of the Financial Action Task Force (FATF). As part of the country’s anti-money laundering (AML) and combating the financing of terrorism (CFT) reforms, specific companies offering cryptocurrency-related services must register with the Argentine government.

Roberto Silva, president of CNV, emphasized that virtual asset service providers that fail to register “will not be able to operate in the country.” The implementation of these laws affecting cryptocurrency providers in Argentina gained momentum when the country’s Senate approved changes aimed at preventing money laundering and terrorist financing on March 14.

The proposed changes to Argentina’s laws regarding cryptocurrency users were reportedly made before Javier Milei was elected president in November 2023. At the time, many cryptocurrency enthusiasts welcomed Milei because of his seemingly positive stance on bitcoin. However, the introduction of FATF requirements has raised concerns about the future of digital assets in Argentina.

The impact of these requirements on businesses operating in Argentina and customers seeking to utilize their services remains unclear. Strike, an app popularly used in Argentina to facilitate bitcoin payments through the Lightning network, has reportedly disabled the ability for locals to send fiat money to bank accounts.

How attitudes toward cryptocurrency will change

For a few years now, Latin America has been growing in terms of cryptocurrency adoption. Studies claim that more than 50% of citizens have used cryptocurrency at least once. Unlike El Salvador, where bitcoin has been recognized as the national cryptocurrency, Argentina has not abandoned its own currency. However, the devaluation of the Argentine peso is very high, with inflation exceeding 130% annually. This forces citizens to turn to cryptocurrency, and they prefer stablecoins.

Research by Americas Market Intelligence (AMI) found that 27% of respondents in Argentina bought cryptocurrency “regularly” as of 2022, up 15% from 2021. The vast majority of the country’s citizens (98%) are aware of cryptocurrency, and one in five residents plan to buy cryptocurrency in the future, primarily for savings purposes. Bitcoin was most often used for investments, but investments in stablecoins (USDT, USDC, DAI) have also grown, as they are more convenient to use for settlements.

The innovation caused mixed reaction from the community. For example, co-founder of the Money On Chain protocol Manuel Ferrari strongly criticized the CNV initiative, pointing out that it makes no sense to create registers of companies, as it will become an obstacle for the development of the market as a whole. And the manager of KamiPay payment service Nicolas Bourbon is sure that the new requirements will have no considerable effect on clients, as the authorities are trying to meet the requirements of international financial organizations, on which Argentina is already heavily dependent.

However, it is obvious that the creation of registers of cryptocurrency companies and citizens will strengthen the control of bureaucracy over the crypto market.

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