Argentina’s Central Bank Blocks New Crypto Offerings from Banks

Argentina Central Bank Blocks New Crypto Services

Only a few days after two of Argentina’s leading banks announced that they will be expanding their offerings to include digital assets, Argentina’s central bank (BCRA) has put a halt to financial institutions providing Argentina cryptocurrency trading.

The BCRA said on May 5 that the action was intended to mitigate the dangers that Argentina cryptocurrency presents to consumers and “to the financial system as a whole.” The BCRA cited the extreme volatility of Argentina’s cryptocurrency regulation, its use in money laundering, and the absence of regulatory protections as reasons for the decision.

On Monday, Banco Galicia and Brubank, two of the country’s major financial institutions, announced that they would enable their clients to purchase Argentina cryptocurrency regulations such as Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Ripple (XRP) (XRP).

The decision to open up cryptocurrency Argentina trading was made after a survey was done by Banco Galicia, in which 60 percent of respondents said that they desired easier access to digital currencies in the future.

Although the central bank has long been skeptical of the central bank of Argentina on cryptocurrency, it recently issued a risk alert to the public in May last year, once again raising concerns about volatility and money laundering, even though there were no signs of “significant levels of acceptance and use,” according to the bank. Statista data analysis form results show that 21 percent of respondents in Argentina have bought or used cryptocurrency as of 2021, which is the sixth-highest adoption rate globally and the highest percentage among Latin American countries.

According to the country’s statistics office, INDEC, inflation increased by another 6.7 percent in March, reaching 55.1 percent year-on-year, the highest rate in 20 years and the highest rate in 20 years. Some Argentinians have resorted to Argentina banned crypto services to protect themselves from the country’s skyrocketing inflation. In April, a small hamlet in the countryside started the process of mining bitcoin to combat inflation.

A comprehensive $44 billion debt plan from the International Monetary Fund (IMF) might explain Argentina’s shift in emphasis from last May, which included a provision requiring the country to “discourage the usage of cryptocurrencies.”

The central bank’s statement runs counter to the mayor of Buenos Aires, who has called for a freeze on the country’s currency. Earlier this month, Mayor Horacio Rodrguez Larreta revealed intentions to digitize the city, to enable inhabitants to pay their taxes in cryptocurrency, among other blockchain-related initiatives.