Argentina’s Govt ‘Discourage’ Crypto Use As Part Of Proposed IMF Deal
Argentina’s government will “discourage” the use of cryptocurrencies as its $45 billion debt restructuring deal with the International Monetary Fund (IMF).
In a memorandum detailing financial policies under the debt agreement, Argentina’s government introduced a framework with goals from 2022 to 2024, focusing on government policies to help the country’s economic growth.
The IMF said on March 3 that it had reached a staff-level agreement with Argentine authorities, but several Argentinian local news sites reported a paragraph referencing cryptocurrencies in a leaked draft of the text days earlier, leaving the country’s crypto sector questioning what this policy could mean if approved.
The IMF wrote:
“Strengthening financial resilience. While commercial banks remain liquid and well-capitalized, strong bank oversight will continue, especially following the unwinding of pandemic-related regulatory forbearance. 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; (ii) further support the current process of digitization of payments to improve the efficiency and costs of payments systems and cash management; and (iii) safeguard financial consumer protection.”
As of now, crypto firms are still largely trying to figure out what the potential impact of ‘discouraging cryptocurrencies’ would exactly mean for the industry.
Argentina’s high inflation and foreign currency controls have pushed local interest in cryptocurrencies over the past couple of years. As a result, Buenos Aires has turned into a key hub for blockchain startups and innovation. The country ranked 10th on Chainalysis’ Global Crypto Adoption Index 2021.
In order to get further clarity, ONG Bitcoin Argentina announced on filed on March 10 a public information request addressed to the country’s economic minister, Martín Guzmán. In the request they asked for the government to provide all documents, reports, administrative files, emails or other documentation that have evaluated cryptocurrencies and their links to money laundering and financial stability in the context of the IMF negotiations.
ONG Bitcoin Argentina’s Executive Director Javier Madariaga wrote:
“We are convinced that the path is neither disincentives or prohibition, but to work in a coordinated manner with the private and public sectors to take advantage of the potential of decentralized finance, so that more and more individuals can transact in a secure manner and security forces can improve their abilities to combat cybercriminals.
It worries us that the authorities are agreeing to disincentivize a technology that the population itself has already massively adopted, instead of unleashing its potential to address historic problems.”
Before the IMF’s executive board can sign off on the debt agreement, Argentina’s Congress must approve it. The country’s Senate discussed the debt restructuring deal extensively on March 17. According to local reports, Argentina’s Senate will vote on the deal late Thursday or early Friday, following approval from the legislature’s lower chamber on March 11.
