The Argentine National Securities Commission (CNV) has announced its intention to issue new regulations to guide the local virtual currency industry in the country.
The CNV’s plan to issue new rules stemmed from a national reform of anti-money laundering laws being deliberated by Argentinian lawmakers. If the proposed reforms scale the legislative hurdles, the CNV would wield wider powers in controlling the virtual currency industry.
The securities watchdog has been making preemptive moves since the start of the month with a plan to consult key stakeholders in Argentina’s virtual currency industry. A public consultation is expected to be in place in the coming months, with the CNV looking to borrow inspiration from other jurisdictions.
“The worst-case scenario is a regulation that cannot be implemented,” a CNV source said.
The pining for a robust legal regime for the local virtual currency is linked to the demands of the Financial Action Task Force (FATF) for member countries. According to the Financial Action Task Force’s (FATF) Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers (VASPs), member countries are expected to step up their anti-money laundering (AML) rules to prevent terrorist financing and drug trafficking.
The CNV confirmed that the FATF will be making a comprehensive evaluation of the Argentine financial system in 2024, hoping it will comply with the organization’s guidelines.
Argentina’s proposed bill will require virtual asset operators in the country to set up tighter internal structures to protect user funds even during the occurrence of black swan events.
Rising adoption levels lure in the taxman
Amid rising adoption levels for virtual currencies in the country, Argentina’s Ministry of Economy has drafted a new bill to incentivize citizens to declare their holdings in exchange for discounted tax rates.
Under the bill, virtual asset holders that disclose their holdings within 90 days of its application would be required to pay a 2.5% tax instead of the usual 15%. Aside from digital assets, the bill also applies to shares, real estate, and funds in foreign bank accounts.
Argentina came in 13th place in Chainalysis’ Global Adoption Index for virtual currencies, fuelled by galloping double-digit inflation and difficult cross-border payment options.
In other news, after enjoying months of relatively cheap electricity, regulators began cracking down on the local digital asset mining industry. The country’s main tax body spearheaded 70 raids that resulted in the arrests of over 40 persons suspected of running illegal mining operations.
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