Argentina’s top financial regulator says that it wants to “work together” with the nation’s crypto industry as it steps up its control over the sector. In an official government release, the National Securities Commission of Argentina (CNV) called its new registry of crypto exchanges and service providers “simple.”
It also claimed the registry does away with “formalities and absurdities.”
Argentina Regulator: Trying to Placate Crypto Sector?
Argentina’s rate of crypto adoption has accelerated in recent years in response to rampant inflation. Previous governments have attempted to cap foreign currency buying. This has driven many people in the nation to stablecoins and cryptoassets like Bitcoin (BTC). And although the nation’s President Javier Milei has spoken out in favor of BTC in the past, Buenos Aires remains dependent on financial support from the International Monetary Fund (IMF).
Milei wants to improve Argentina’s primary balance by 5.5% of GDP quickly. Almost no IMF program in history did that. The typical program achieves just 1% of GDP in adjustment. Macri tried 4.8% in late 2018 and everything blew up. History will repeat itself. pic.twitter.com/SnihsMdD7t
— Sergi Lanau (@SergiLanauOE) March 27, 2024
The Financial Action Task Force (FATF) has warned Argentina that it may be placed on the
FATF “grey list” if it fails to police its crypto exchanges. Last month, media outlets in the nation reported that Buenos Aires had “caved in” to FATF demands out of concern the IMF may withhold support.
Senators fast-tracked a bill that laid down the legal framework for exchange regulation. The CNV responded four days later with formal plans for a “registry of crypto operators.” But the CNV now appears keen to strike a conciliatory note with domestic crypto firms, who have warned of “encroaching” regulation.
The CNV and its President Roberto Silva held a meeting with legal representatives and members of the Argentine Fintech Chamber, Criptonoticias reported on April 2.
The CNV President Roberto Silva speaks at a meeting with domestic crypto and blockchain leaders. The CNV President Roberto Silva speaks at a meeting with domestic crypto and blockchain leaders.
Silva said he would endeavor to “listen to” and “understand” the needs of crypto companies before “moving forward” with more regulation.
He said that it was important for regulators and the private sector to “work together,” adding:
“We will listen to them. We will make every effort to understand them. And then we will
decide how best way to guarantee compliance with the objectives of [FATF standards]. We
will try not to hinder the activity of [crypto firms].”
Has the Government ‘Betrayed’ the Crypto Sector?
The CNV chief promised to incorporate the “deregulation promoted by the national government,” but insisted that the regulator would “take the mandate of the law into account.”
Under the CNV’s plans, all virtual asset service providers (VASPs), including exchanges, wallet providers, and crypto payment gateways, must apply for operating permits. Those firms that fail to do so face possible criminal prosecution. And, as is the case in many other nations that adhere to FATF crypto guidelines, overseas firms that target domestic users will also need to apply for permits.
The move has led many to accuse Milei of betraying them. The President famously took to the streets with a toy chainsaw to
symbolize what he intended to do with overly constrictive laws.
He also destroyed a piñata effigy of the nation’s Central Bank on national television leading many to believe he would do away with financial regulation – not beef them up.
Argentina’s sequential inflation is definitely easing after the post-deval shock, but it’s nowhere close to the levels that would justify rate cuts https://t.co/xeeGCkxzM8 pic.twitter.com/Yd9sLh4HlO
— Natalia Gurushina (@NGurushina) March 12, 2024
However, others argue that Argentina needs crypto regulation to help legitimize the sector, build trust, and protect investors from scams. Argentina’s crypto regulation journey began in 2014, when the Financial Information Unit began calling upon citizens to report their crypto-related operations.
The government launched a crypto tax system in 2017, and in 2019, began asking exchanges to submit monthly reports on their activities.
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