Argentina’s central bank has banned banks and payment apps from offering digital asset-related services in a bid to reduce the payment system’s exposure to “risky” assets.
In its statement, the Central Bank of the Argentine Republic (BCRA) prohibited banks from offering any service related to a digital asset that it doesn’t regulate.
“Payment service providers that offer payment accounts […] may not carry out or facilitate operations with digital assets, including crypto assets, that are not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic,” the statement read.
Since the central bank doesn’t regulate any digital asset, the ban extends to all tokens in the market.
The ban comes just days after the largest private bank in the country ventured into digital assets. Banco Galicia revealed last week that it would allow its 7.5 million users to buy and sell digital assets on its platform. It claimed that its study had shown 60% of its users wanted digital asset services.
Around the same time, digital bank Brubank SAU also unveiled similar services.
BCRA, in its statement, claimed the ban protects the Argentine payments system from risky digital asset exposure.
“The measure ordered by the BCRA’s board of directors seeks to mitigate the risks associated with transactions with these assets that could be generated for users of financial services and for the financial system as a whole,” it said.
According to local media, Argentine payment service providers are exploring their options. “We are analyzing it to find out if it harms us in any way,” one company told Forbes Argentina.
The ban comes just a month since the Latin American country received a $44 billion loan from the International Monetary Fund. The loan has been in the pipeline for months and came with its stipulations. One of these was that Argentina had to discourage digital asset adoption.
JUST IN: In response to receiving a loan from the IMF, 🇦🇷 Argentina is making good on their promise to go hard against crypto.
A new law goes against the constitution and prohibits payment service providers from offering their customers #Bitcoin 😱 pic.twitter.com/s5odOtgpnI
— Bitcoin News 🌴 Rooftop Meetup May 19th (@BitcoinNewsCom) May 5, 2023
“To further safeguard financial stability, we are taking important steps to (i) discourage the use of crypto-currencies with a view to preventing money laundering, informality and disintermediation,” stated a letter of intent signed by Argentina.
For Argentina, the digital asset crackdown is collateral damage in its pursuit of economic stability. The country has struggled recently as inflation and currency depreciation wreaked havoc. Argentina was also staring at a $2.8 billion payment to the IMF in March and $39 billion this year for its loans. With the latest bailout, the country received $10 billion and was granted three more years to pay its loans.
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