Tuesday, May 21, 2024

ECONOMY | 06-05-2022 08:39

Argentina slams brake on crypto, banning purchases through banks

Central Bank bans financial institutions from offering clients any operations involving unregulated digital assets, effectively banning engagement with cryptocurrencies.

Argentina’s Central Bank dealt cryptocurrencies a blow Thursday, prohibiting financial institutions in the South American country from offering clients any operations involving unregulated digital assets.

The monetary authority banned operations that allow bank clients to purchase crypto, just days after two large institutions announced they would let clients buy Bitcoin and other digital currencies. The ban also includes assets whose returns are determined by the fluctuations of cryptocurrencies.

Argentines are embracing cryptocurrencies at a quick pace as recurring currency crises and inflation running above 50 percent annually erodes the value of their savings. The country is among the world’s top 10 with the highest adoption of crypto, according to specialised website Chainalysis.

Earlier this week, Banco Galicia, the country’s largest private bank by market value, and digital bank Brubank announced they would allow their customers to purchase crypto including Bitcoin, Ether and USDC.

With the measure published Thursday, the Central Bank banned such operations for the entire financial sector, saying it aims to “mitigate the risks” involved in transactions of digital assets.” Those include high volatility, cyberattacks and money-laundering, according to a statement. 

Financial institutions should focus on “financing investment, production and consumption of goods and services,” it added.

by Ignacio Olivera Doll & Patrick Gillespie, Bloomberg


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