Argentina Forbids Banks From Providing Crypto Services

Argentina Forbids Banks From Providing Crypto Services

Argentina’s central bank issued a statement stating that the country’s financial industries are not permitted to offer unregulated crypto-related services. This basically prohibits any cryptocurrency transactions inside the mainstream economy.

Following the International Monetary Fund’s (IMF) approval of a $45 billion loan for Argentina in March, which specified that the country must dissuade the use of crypto, and two of the country’s major banks, Banco Galicia and Brubank, announced on Monday that they now enable their consumers to buy Bitcoin, Ethereum, USDC, and Ripple.

The BCRA Board of Directors has begun taking measures to reduce the risk associated with cryptoassets. The board highlighted market instability, computer hacks, and money laundering. The statement also referenced virtual currencies whose income is affected by crypto market volatility.

The statement added that: “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.”

The continued acceptance of cryptocurrencies in the country is primarily due to people’ high rates of inflation. The government’s inflation numbers from last month indicated yearly inflation rates of 55 percent for the month, according to a report by Reuters.

The central bank and the National Securities Commission (CNV) together released a notice in May last year. The notice requested information on the consequences and hazards associated with digital assets. It also urged investors to have a level head in order to minimize their risk.

The central bank’s statement contradicts plans of the mayor of Argentina’s metropolis, Buenos Aires. Mayor Horacio Rodrguez Larreta revealed plans to digitize the city in late April, including proposals to enable inhabitants to pay their taxes in cryptocurrency and other blockchain initiatives.

The government is taking the daring step of banning crypto services in order to prevent its residents away from investing their money in digital currencies like Bitcoin, which they see as a danger to the country’s financial infrastructure.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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