Argentina's Banks and Payment Apps Banned from Offering Digital Assets
The new rule aims to protect the country's payment system from unregulated and volatile cryptocurrencies, but it could also stifle the growth of the local crypto industry that has been thriving amid economic turmoil.
In a bid to protect the country's payment system from unregulated digital assets, the Central Bank of Argentina has issued a new rule that forbids payment providers from allowing crypto transactions on their platforms.
The bank claims that this measure is aimed at reducing the exposure of the country's payment system to digital assets, which are not regulated by any national authority. The rule applies to both payment fintechs and financial institutions that offer payment accounts.
This decision could have a significant impact on the local crypto industry, which has been booming amid the economic crisis and hyperinflation in Argentina. The value of Bitcoin in Argentine pesos hit a record high in April, soaring more than 100% since the start of the year. The Argentine peso, on the other hand, has lost almost half of its value against the US dollar in the past year.
Some regions in Argentina have already adopted cryptocurrencies as a way to hedge against inflation and currency devaluation. For example, the province of San Luis launched its own stablecoin pegged to the US dollar in December, which is available to all residents and backed by liquid financial assets. Additionally, some 30% of consumers in the country are said to use stablecoins for day-to-day transactions.