Argentina’s central bank, BCRA, has banned all financial institutions from offering Bitcoin or other cryptocurrency services to their customers.
According to an announcement on Thursday, the bank noted that the measure was taken in an effort to mitigate the risks associated with cryptocurrencies. In particular, it indicated that various actors involved in transactions with these assets were not established in the country, which could generate exemptions from the general regulations of the BCRA.
“Financial entities may not perform or assist their clients to perform transactions with digital assets, including cryptographic assets and those whose returns are determined according to the variations they record, which are not regulated by an authority national and authorized by the Bank.” The ad read.
The announcement follows a $45 billion bailout deal with the International Monetary Fund (IMF) in March containing a savage clause that aimed to tear up cryptocurrencies.
The agreement, which aimed to improve Argentina’s debt situation, was accompanied by a letter of intent signed by the president of the central bank and the minister of economy. The said letter assured the IMF of Argentina’s commitment “to discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation”.
This week’s announcement thus sparked a wave of condemnation from the crypto community, with most people believing that the IMF is using its position to “blackmail” needy countries into giving up cryptocurrencies. in exchange for bailouts.
“In order to secure an IMF bailout, the Argentinian government has pledged to crack down on Bitcoin” tweeted Alex Gladstein, CEO of the Human Rights Foundation, “There are few things more dishonorable than a corrupt regime trying to save its own skin by denying its people access to better money.”
“The IMF is scared to death of Bitcoinalso wrote Dennis Porter of the crypto YouTube channel “Breaking”.
The IMF has also tried to get El Salvador and, more recently, the Central African Republic to push their ambitions to pursue Bitcoin as legal tender to “further preserve financial stability.”
Driven by necessity, cryptocurrency adoption in Argentina has boiled over as the country grapples with high inflation figures for a decade. According to a recent report by Chainalysis, Argentina ranked 10e worldwide for crypto adoption, with 40% of businesses in the Argentinian city of San Martin de Los Andes now accepting bitcoin. Prior to Thursday’s announcement, two of the country’s largest private banks, Brubank and Banco Galicia, had begun rolling out crypto-trading services.