The Central Bank of the Argentine Republic (BCRA) has blocked crypto-trading launched four days earlier by other Argentine banks.
Argentina, Central Bank blocks crypto-trading activities
The BCRA intervened to block crypto-trading activities, four days after two of the country’s largest banks, Banco Galicia and Brubank, allegedly allowed their customers to buy Bitcoin (BTC), Ether (ETH), USD Coin (USDC) and Ripple (XRP).
Argentina's Central Bank cited volatility, money laundering and the lack of regulatory protections as reasons for blocking banks from offering #Bitcoin
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) May 6, 2022
“BREAKING: Argentina’s Central Bank has blocked banks from offering Bitcoin just days after the nation’s 2 biggest banks announced plans for #Bitcoin services. Argentina’s Central Bank cited volatility, money laundering and the lack of regulatory protections as reasons for blocking banks from offering Bitcoin”.
According to reports, the measure ordered by the BCRA board aims to mitigate the risks associated with transactions with these assets that could be generated for users of financial services and the financial system as a whole.
Argentina’s Central Bank discourages cryptocurrency offerings
The launch of the new cryptocurrency trading service, had come after a survey conducted by Banco Galicia, in which 60% of respondents reportedly said they wanted easier access to digital currencies.
But the Central Bank, just four days after the launch of the crypto service by the country’s two largest banks, decided to block the service.
The reason given by the BCRA concerns the risks associated with crypto such as:
- high volatility;
- risks associated with operational disruptions and cyber attacks;
- money laundering/terrorist financing and potential non-compliance with foreign exchange regulations;
- lack of guarantees and comprehensive information that current regulations provide to users of financial services;
- cross-border nature of transactions.
But why “discourage” the use of cryptocurrencies? In March, the agreement signed with the IMF obliges the Argentine government to “discourage” the use of crypto in exchange for a debt restructuring plan of almost $45 billion.
Bitcoin to fight inflation
Yet some in Argentina strongly believe that Bitcoin is the solution against inflation.
Last July José Luiz Ramon, an Argentinean deputy, presented a bill to introduce salary payments in BTC and crypto.
The following month, President Alberto Fernandez himself said that serious thought was being given to expanding the use of crypto and the possibility that the BCRA might soon create a digital state currency.
Not only that, but in April, a small municipality in the province of Santa Fe, Serodino, reportedly decided to focus on crypto mining to combat the economic problems linked to the crisis and high inflation.