The BCRA and the CNV highlight that bitcoin is not legal tender in Argentina. Bitcoin’s return on investment in 7 years exceeded that of state-regulated assets.
The Central Bank of Argentina (BCRA) issued yesterday, May 20, a joint statement with the National Securities Commission (CNV) in which it warns “about the risks and implications” of bitcoin (BTC) and crypto-assets, in general.
The signatory entities of the text add that these financial instruments in Argentina are not legal tender. Also, these financial instruments may appear highly volatile, vulnerable to cyberattacks, and they lack the legal backing of other assets. The risk of fraud is high and exposes their users to commit money laundering. Due to the cross-border nature of the transactions, these could remain outside the jurisdiction of local courts.
The text shows similarities to the first press release that the BCRA published on the matter, in 2014. There were several arguments to that of the current statement, such as the volatility of bitcoin, the “lack of support,” the possibility of using it to launder money, and that it is not legal tender in Argentina.
In the text published yesterday, these warnings about risks are given even though, according to financial institutions, crypto-assets currently do not possess significant levels of acceptance and use in Argentina.
South America is Still on Diapers When it Comes to Cryptocurrencies
The growing visibility that cryptocurrencies have in that South American nation still has a long way to go, this way includes publicity of exchanges on public roads, hundreds of offers on P2P exchanges, and massive virtual communities such as the Facebook group “Bitcoin Argentina”. with more than 70 thousand members.
Even so, despite the alleged low use of bitcoin in Argentina by the BCRA and the CNV, these organizations consider that users must always adopt a precautionary attitude.
It is also important to clarify that the statement does not send attacks against investing in cryptocurrencies but rather focuses its arguments on the importance of knowing the risks related to such a practice.
The document reads: “It is important that those who decide to operate with crypto assets or invest in products related to them have access to sufficient information to understand and assess the risks associated with them.”
Bitcoin and the Assets Regulated by the BCRA and the CNV in the Next years
In the period between the two reports, the Argentine peso lost 90% of its value against the US dollar. The national currency (according to the market price or «blue dollar») went from being worth USD 0.12 in June 2014 to USD 0.01.
The volatility of the Merval was so massive that it included declines of more than 50% in a few days. Even so, the BCRA and the CNV bring detailed analysis on the volatility of crypto assets that, according to the text, can show significant fluctuations in short periods and lead to considerable financial losses for their holders.
By: Jenson Nuñez
