The monetary authority said the ban aims to reduce Argentina’s payments system’s exposure to digital assets.
On May 4, Argentina’s central bank banned payment providers from offering crypto transactions, saying it intended to reduce the country’s payment system’s exposure to digital assets.
Payment providers are not allowed to offer or facilitate crypto services through their apps, according to the monetary authority’s statement. The move brings payment fintech companies and financial institutions under the same rules in the country.
“Payment service providers offering payment accounts […] are not allowed to carry out or facilitate operations with digital assets, including encrypted assets, which are not regulated by the competent national authorities and are not authorized by the Central Bank of the Republic Argentina,” the Authority said. Cryptocurrencies are not regulated in Argentina, which means that all coins and tokens are subject to the decision.
It is unclear how the measure will affect the local crypto industry. The payment provider declined to comment on the decision, local media reported. Argentina’s Fintech Chamber urged the government to reconsider the decision, arguing that it “limits access to technologies that offer multiple benefits and opportunities for our society.”
Hyperinflation drives cryptocurrency adoption in Argentina. Bitcoin price in April
stock goes down
The Argentine peso (ARS) hit a new all-time high as BTC traded at over 6.59 million Argentine pesos – up over 100% so far this year.
Stay safe in Web3. Learn more about Web3 Antivirus →
Inflation in the country rose 104.3% year-on-year in March, following a 102.5% rise in the previous month, according to the National Statistics Office.
Bitcoin’s popularity in the country also coincides with the ongoing devaluation of the Argentine peso, Cointelegraph reported. The currency has fallen nearly 50% against the dollar in the past year.
ARS/USD chart. Source: Google Finance
Even some Argentine cities are looking for a safe haven in cryptocurrencies amid the ongoing economic crisis. In December, the Argentine province of San Luis allowed the issuance of its own stable currency pegged to the dollar, available to all residents and backed 100% by liquid financial assets.
Chainalysis found that more than 30% of consumers in Argentina use stablecoins for everyday purchases, most likely for small retail transactions under $1,000.