Argentina moves to tighten grip on crypto transactions

Quick Take

  • Argentina’s central bank provided new guidelines last week that could make it harder for some companies to carry out crypto-related activities.
  • The move followed statements from economic officials to the IMF earlier in the year that the country would discourage the use of cryptocurrencies.  

Argentina's central bank is moving to tighten its grip on crypto transactions in the inflation-rattled country, having last week issued new guidance that prohibits some companies from certain activities.

Specifically, registered payment service providers known locally as PSPCPs may not carry out or facilitate operations with digital assets that are not regulated and authorized by the central bank. The notice, dated May 4, says that the providers won't be able to carry out the transactions on their own, or initiate them on their apps or web platforms. 

Companies formally registered with the central bank as payment service providers include large players in the space such as MercadoLibre, Bind Pago, Mobbex, Nubi and Pomelo. The rules appear to target "automatic purchase buttons," and interested users who want to conduct such transactions "should do it on their own accord."

The central bank said that the new measure aimed to "mitigate the risks that operations with these assets could generate for users of financial services and the national payment system."

Crypto use in the country has been rising, especially as Argentines rush to protect their savings in the face of annual inflation above 100%, multiple exchange rates and capital controls. Still, widespread adoption has faced obstacles, especially with fear of volatility and widespread skepticism about possible scams.    

Bitcoin Argentina NGO says rules are surprising and arbitrary 

Bitcoin Argentina, an NGO that works to promote the use of cryptocurrency and decentralized technology in the country, called the measure surprising and arbitrary. 

"It's not understood what objective the central bank is seeking by prohibiting an activity that is entirely satisfactory and useful for the clients of the local exchanges," it said in an emailed statement. "This will have the immediate effect of making it difficult for Argentine workers and savers to access savings alternatives that protect them from inflation."

The NGO also said it would promote