In a significant move that marks a new chapter in the cryptocurrency regulatory landscape in Latin America, Argentina has introduced mandatory registration for cryptocurrency service providers, including Bitcoin platforms. This development is part of a broader effort to bring the burgeoning sector under regulatory oversight amid the growing adoption of Bitcoin in the country. The National Securities Commission (CNV), Argentina’s market regulator, spearheaded this initiative, with the aim of aligning with the recommendations of the Financial Action Task Force (FATF) on the fight against money laundering and the financing of terrorism. . The establishment of the Virtual Asset Service Provider Registry (PSAV) requires cryptocurrency companies to register and provide specific information on the CNV website to operate legally within Argentina. This regulatory step is considered crucial for Argentina’s compliance with Law No. 25,246, which seeks to reform the national money laundering and terrorist financing prevention system.
Impact of regulatory changes on Argentina’s crypto landscape
The introduction of this mandatory registration comes at a time when Argentina faces serious economic challenges, including hyperinflation, which reached 211.4 percent in 2023 (the highest in 32 years) and a 50 percent devaluation of its currency. hundred. Amid these economic problems, Argentines have increasingly turned to cryptocurrencies as a financial haven, leading to a significant increase in cryptocurrency adoption. Local cryptocurrency exchanges such as Lemon, Ripio and Belo have reported surges in Bitcoin purchases, indicating a growing reliance on cryptocurrencies as a hedge against currency devaluation. However, this regulatory change has drawn criticism from Bitcoin advocates who see it as a major misstep by President Javier Milei’s administration. Despite Milei’s previous pro-crypto stance, his government has opted for tighter control over the industry, raising concerns about the future of cryptocurrencies in Argentina.
Argentina’s Balancing Law: Encouraging Innovation and Ensuring Compliance
The CNV’s decision to implement mandatory registration for cryptocurrency service providers reflects Argentina’s commitment to creating a more secure and transparent environment for the cryptocurrency industry, while addressing global concerns about money laundering and the financing of terrorism. This move is seen as a balancing act by President Milei’s administration, which aims to support digital assets while implementing FATF recommendations. Despite regulatory uncertainties, demand for Bitcoin has skyrocketed in Argentina, reaching levels not seen in almost two years. However, recent disruptions have affected cryptocurrency-based financial activities, such as issues encountered by users of Strike, a popular app for Bitcoin transactions over the Lightning network. As Argentina positions itself to capture greater market share in the changing global crypto landscape, this regulatory update marks a significant advance in the country’s approach to managing digital assets and preventing financial crimes.
