Argentina's Central Bank Is Considering Prohibiting Local Financial Institutions From Offering Cryptocurrency Services

Despite the central bank’s tough attitude, Argentina’s digital asset market has been booming for some time. The COVID-19 pandemic hit the country, which had been dealing with an uncertain economy in recent years.

Argentina’s largest private bank by market value, and Brubank, Argentina’s digital bank, collaborated with crypto wallet Lirium to offer cryptocurrency services to customers earlier this week. Both sides cited the rising demand for digital goods among users, particularly among younger generations, as justification.

Binance’s Latin American team believed at the time that the number of new users in Argentina had tripled in a year. Furthermore, Argentina’s wide territory, low electricity, and favorable climate aided the local bitcoin mining industry.

According to the BCRA, there are still no rules in place for the crypto industry in Argentina, thus local banks can. The Argentine Republic’s Central Bank (BCRA) has made it illegal for domestic financial institutions to facilitate cryptocurrency transactions. The news comes only days after two of the country’s main banks, Banco Galicia and Brubank, announced that customers will be able to buy digital assets through their official websites.

Argentina’s Central Bank Has Banned Cryptocurrency Offerings

Banco Galicia, Argentina’s largest private bank by market value, and Brubank, Argentina’s digital bank, collaborated with crypto wallet Lirium to offer cryptocurrency services to customers earlier this week. Both sides cited the rising demand for digital goods among users, particularly among younger generations, as justification.

Nonetheless, Argentina’s central bank noted that domestic monetary institutions are prohibited from giving such chances because the BCRA has yet to implement restrictions.

The BCRA’s Board of Directors has taken this action in order to reduce the risks that operations with these assets may pose to users of financial services and the financial system as a whole.

The BCRA, like many other central banks, listed some of the most widely discussed potential hazards associated with digital assets. Bitcoin and cryptocurrencies, according to the institution, are extremely volatile and might be used for money laundering and terrorism financing.

While most crypto assets have significant price volatility, it is debatable whether they can be easily used in illegal activities. For starters, the blockchain of bitcoin is completely transparent, as all transactions are recorded on the digital ledger and visible to all participants. Cash, on the other hand, is potentially untraceable and is still commonly utilised in drug transactions, armament financing, and prostitution, among other things.

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Argentina Is Indeed A Good Cryptocurrency Region

Despite the central bank’s tough attitude, Argentina’s digital asset market has been booming for some time. The COVID-19 pandemic hit the country, which had been dealing with an uncertain economy in recent years. By the end of 2020, the financial crisis had escalated to the point where many locals would rather invest in crypto than keep their depreciating fiat currency.

Binance’s Latin American team believed at the time that the number of new users in Argentina had tripled in a year. Furthermore, Argentina’s wide territory, low electricity, and favorable climate aided the local bitcoin mining industry. Several bitcoin exchanges saw the trends and formed relationships with the domestic sports industry. Bybit announced a partnership with the Argentine Football Association (AFA) in November to become the team’s Global Main Sponsor. Binance followed suit shortly after.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing