Argentina’s central bank recently banned payment providers from facilitating crypto transactions, intending to reduce the nation’s payment system exposure to digital assets. However, the move aligns payment fintechs and financial institutions under the same regulations, raising questions about the impact on the local cryptocurrency industry.
New Regulations Restrict Payment Providers’ Crypto Services
In a statement by the monetary authority, payment providers are now prohibited from offering or facilitating any crypto services through their platforms.Â
The authority elaborated:
 “Payment service providers that offer payment accounts […] may not carry out or facilitate operations with digital assets, including crypto assets, that are not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic.”Â
Cryptocurrencies remain unregulated in Argentina, making all coins and tokens subject to the decision.
Uncertainty Surrounding the Local Crypto Industry
The effects of the ban on the local crypto industry remain unclear. Local media sources reported that payment providers declined to comment on the decision. Argentina’s fintech chamber urged the government to reconsider the decision, asserting that it “limits access to a technology that offers multiple benefits and opportunities for our society.”
Argentina has witnessed a surge in crypto adoption due to ongoing hyperinflation. Bitcoin’s price reached a record high in Argentine pesos (ARS) in April, with the BTC exchange rate surpassing 6.59 million ARS—up more than 100% year-to-date. In March, the country’s inflation rate skyrocketed by 104.3% annually, following a 102.5% increase the previous month, according to data from the national statistics office.
The Argentine Peso has plummeted nearly 50% against the United States dollar within the past year. Amid the ongoing economic crisis, some Argentinian cities have turned to cryptocurrencies as a safe haven. In December, the Argentine province of San Luis authorized the issuance of its stablecoin pegged to the U.S dollar. That currency is available to all residents and fully collateralized with liquid financial assets.
The Central Bank of Argentina’s decision to ban payment providers from facilitating crypto transactions signals a significant change in the nation’s approach to digital assets. While the impact on the local cryptocurrency industry remains uncertain, it is clear that the growing popularity of crypto assets in Argentina, driven by hyperinflation and the devaluation of the Argentine peso, will likely continue to shape the country’s financial landscape in the years to come.
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