The government’s measure will be in force for a period of 180 days, while proceedings are conducted on paper again. The Association of Entrepreneurs of Argentina questioned the decision by saying that it represents a delay.
It was reported that the Argentine government will suspend its blockchain-based platform for the digital registration of companies for at least 180 days. According to the authorities, the measure seeks to establish greater control and rearrange the registration of companies so that the General Inspection of Justice (IGJ) has interference in the process of incorporating companies.
The Simplified Share Corporation (SAS) digital service became operational in 2017, during the management of former President Mauricio Macri, and allows companies to be created in 24 hours instead of in 55 days as in the past. However, Ricardo Nissen, head of the IGJ, stressed that this mechanism does not allow establishing control over the records.
According to Nissen, there is no control to constitute a society today as anyone can decide to do it. He noted that “Macrismo” thought that by enabling the constitution of companies in 24 hours people would receive a lot of investments. However, the official considers that it was not a good idea. It is important to mention that the suspension would take effect after General Resolution 06/2020 is published in the Official Gazette.
Once the digital procedure has been suspended, the interested companies must apply for their registration in paper formats. Applications for changes in headquarters, changes in capitalization, dissolutions, transformations of companies, and the appointment of authorities will also be affected.
The authorities intended to establish centralized physical registration so that third parties can control the protocol, something that was eliminated when adopting distributed registration based on distributed accounting technology (DLT) or blockchain.
The government’s decision was not well received by the Association of Entrepreneurs of Argentina (ASEA), who questioned the measure by labeling it as a delay for the sector. Alejandro Ramírez, responsible for public policies from the aforementioned association, said that the work of entrepreneurs will become more difficult.
Ramírez considers that this decision delays and greatly hinders the work of Argentine entrepreneurs. He says that now they have to return to a nineteenth-century system, which is completely anachronistic and easy to adulterate. In this sense, Argentina is virtually the only country in the world going from a digital system back to a paper format. Not only does this fact threaten the transparency of companies, but it also triples the costs of constituting a society.
Unlike this particular case, the use of cases of distributed and decentralized records is increasing globally. Certification of university diplomas, digital identity, and product traceability are among the many applications of blockchains.
DLT is an original technology of Bitcoin as a digital system that allows two or more people to conduct any type of transaction without the participation of intermediaries. The data are recorded in a distributed way in the network and cannot be modified, that is, they are immutable.
By Alexander Salazar