Argentina’s central bank blocks financial institutions from offering crypto

Argentina’s central bank blocks financial institutions from offering crypto

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Alberto Fernández

Argentina’s central bank (BCRA) has rejected the use of digital assets in financial institutions, saying the financial entities in the country cannot allow this kind of service since crypto assets are not regulated.

It has announced this today, two days after two banks had opened up crypto trading for their clients, but the bank cannot allow the customers to use cryptocurrencies.

Early this month, the major private bank, Banco Galicia, and all-digital Brubank announced that they would offer crypto trading services to their clients through the investment portals on their websites. Unfortunately, the BCRA has turned down this service.

The Bank’s view on crypto

The bank views the digital assets as a digital representation of the value of rights that are passed on and stored electronically using Distributed Ledger Technology (DLT) or other similar technology.

The central bank stated that the step taken by the Board of Directors of the BCRA targets to mitigate risks associated with the operations of these assets, which could affect the customers and the financial system as a whole.

The current president, Alberto Fernández, said that some Argentines had already embraced crypto as a convenient way to save and spend money, especially when dealing with the country’s high inflation rate and currency control.

In March, Argentina’s government said that it will discourage the use of cryptocurrency. This is because of the nearly $45 billion debt restructuring deal with the International Monetary Fund (IMF).

In the same month’s memorandum, the government promised to take action to discourage the use of cryptocurrencies in order to prevent money laundering, informality, and disintermediation. This is additional to the government’s measures to strengthen the country’s financial stability.

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