The Central Bank of Argentina considers it necessary to monitor the cryptocurrency sector. The discourse of international organizations on the use of Bitcoin in illicit activities like money laundering recurs.
Two months ago, the NGO Bitcoin Argentina requested public information on the agreement between the government and the International Monetary Fund (IMF). However, the Central Bank (BCRA) is the entity that provided it instead of the Ministry of Economy.
As the Ministry of Economy assigned that responsibility to the BCRA, the latter had to respond to the request. They did that following a formal injunction made by the NGO Bitcoin Argentina for administrative silence.
On April 25th, the BCRA stated that the agreement signed with the IMF does not focus on discouraging the use of cryptocurrencies.
The government agency said the Memorandum of Economic and Financial Policies is part of the Strengthening of financial resilience policies contained in the agreement. They also explained that the reference to crypto assets is not the axis/focus of the program they will implement.
The technical document supporting the agreement with the IMF contains a section that aims to discourage the use of cryptocurrencies. It states that its objective is to prevent money laundering, informality, and disintermediation.
That set off the alarms among Argentine bitcoiners and led the NGO to request the government for official information.
One of the questions they asked the government was why they discourage the use of cryptocurrencies. At that time, the fact that Argentina became the first country to commit to applying anti-Bitcoin measures drew attention.
They Discourage the Use of Cryptocurrencies Due to their Alleged Risks
The Central Bank reviews its position on cryptocurrencies to state its reasons for discouraging the use of crypto assets in Argentine. They view the sector as a source of risk and potential vulnerabilities of the local financial system.
The government entity believes that it is necessary to monitor cryptocurrencies constantly. In addition, they argue that there is a lack of safeguards and that crypto assets are prone to operational disruptions and cyberattacks.
The BCRA highlights the alleged risks of using cryptocurrencies for money laundering and terrorist financing. They are against their cross-border nature, the volatility in their prices, and the variable support in fiat currency.
The Central Bank refers to reports from the Bank for International Settlements (BIS), the Financial Action Task Force (FATF), the Financial Stability Board (FSB), and the IMF. Those studies support the opinion matrix that portrays cryptocurrencies as assets risky to the stability of the international financial system.
Based on those materials, the BCRA wrote that they had adopted an approach of prudence. They said they published a document to provide information and warn about alleged possible risks that crypto assets may carry. They also recommended being careful to reduce any likely source of vulnerability for users and investors.
The proposals of the BCRA contradict the results of studies that indicate that the use of cryptocurrencies in illicit activities is insignificant. In 2021, only 0.15% of the transactions conducted with cryptocurrencies involved fraud or money laundering. Those percentages are much lower than those related to operations with fiat money.
The Argentine Central Bank seeks to diminish the sector saying that cryptocurrencies do not show significant acceptance and use in Argentina. However, it does recognize the speed of developments and the growing interest they arouse.
By Alexander Salazar
