Argentina’s government would ‘discourage’ the use of crypto under the terms of a proposed IMF agreement
Argentina’s government has indicated that it would prohibit the use of cryptocurrencies as part of a roughly $45 billion arrangement with the International Monetary Fund to restructure the country’s debt (IMF).
According to a memorandum outlining the government’s proposed financial regulations, the government will “discourage” the usage of cryptocurrencies in order to combat money laundering and other illegal activity.
According to local sources, Argentina’s lower house of the national legislature accepted the accord; the upper chamber reportedly approved the arrangement late Thursday.
Argentina’s government has indicated that it would restrict the use of cryptocurrencies as part of a planned roughly $45 billion debt restructuring agreement with the International Monetary Fund (IMF), leading the country’s crypto industry to speculate on the implications of such a policy if approved.
Argentina’s government put forth a framework with targets from 2022 to 2024 in a memorandum defining financial strategies under the debt accord. These policies are aimed at assisting the country’s development and resilience.
The IMF declared on March 3 that it had achieved an agreement with Argentina’s authorities at the staff level, although numerous Argentine news outlets had noticed a passage addressing cryptocurrency in a leaked copy of the document days before.
According to the IMF’s official text: “Consolidating financial resiliency. While commercial banks remain liquid and well funded, robust bank scrutiny will continue, particularly as regulatory forbearance due to the epidemic is phased off. To further safeguard financial stability, we are taking significant steps to discourage the use of crypto-currencies in order to prevent money laundering, informality, and disintermediation; (ii) accelerate the current process of payment digitization in order to improve the efficiency and cost of payments systems and cash management; and (iii) protect financial consumers.”
For the time being, crypto firms and organisations are mainly unsure of the precise effect of discouraging cryptocurrency. On March 17, an IMF representative declined to offer more details to The Block.
Argentina’s severe inflation and currency regulations have fueled local interest in cryptocurrencies in recent years, transforming Buenos Aires into a hotbed for blockchain entrepreneurs and innovation. On Chainalysis’ most recent Global Crypto Adoption Index, the nation was rated tenth.
To elucidate the situation, the nonprofit group ONG Bitcoin Argentina said on March 10 that it has submitted a public information request to the country’s economic minister, Martn Guzmán. The information request requests that the government produce any papers, reports, administrative files, emails, and other data pertaining to the evaluation of cryptocurrencies and their ties to money laundering and financial stability during the IMF discussions.
“We are convinced that the path forward is not through disincentives or prohibition, but through coordinated efforts between the private and public sectors to leverage the potential of decentralised finance, enabling an increasing number of individuals to transact securely and security forces to strengthen their ability to combat cybercriminals,” ONG Bitcoin Argentina Executive Director Javier Madariaga wrote in a March 10 blog post explaining the action. “It concerns us that the authorities have agreed to disincentivize a technology that the populace has already accepted in large numbers, rather than maximising its potential to solve historical issues.”
Earlier this year, Spanish-language publications such as Criptonoticias and iProUP reported on the ONG’s move.
Argentina’s Senate unanimously approved the debt settlement late Thursday evening, after a long discussion that began in the late afternoon. The deal had previously been approved by the lower house of the Knesset on March 11. The IMF’s executive board must now debate and ratify the accord at the staff level.