According to Cuattromo, the regulation on cryptocurrencies in Argentina should not harm innovation. The president of the financial institution says that Bitcoin is a product “whose nature very few people understand.”
Juan Cuattromo, the president of Banco Provincia of Buenos Aires, recently spoke about Bitcoin (BTC) and others. He said that the State must implement regulations on them but in such a way that they do not affect innovation.
The economics graduate argued that regulation is necessary “to protect the rights of users who have less information and knowledge.” According to the professional, this would serve to “avoid posing systemic risks,” according to the state news agency Télam.
Cuattromo defines cryptocurrencies as “products whose nature very few people understand” and that “operate in completely unregulated markets.” In this way, the president of the state bank justifies his position that “there is a whole universe with a regulatory agenda that we cannot skip.”
He considers that one of the risks of Bitcoin and other cryptocurrencies is what can “happen in bad scenarios.” However, he did not specify if he was referring to steep falls in price or other types of scenarios. Faced with adverse situations for cryptocurrencies, the official fears that people will complain to the State and it will not be able to respond adequately.
“Experience tells us that regulation has a role to protect the rights of users in bad scenarios. For example, subprime mortgages seemed like very effective access to housing. The problem is that no one internalized the risks correctly, for which the regulation has a role,” said Cuattromo.
Argentina’s Bitcoin Regulation “Must Not Kill Innovation”
In the interview with Télam, Cuattromo reiterated that “the regulatory agenda should not kill innovation, but rather accompany and understand it.” According to the economist, it is necessary “to protect those who have less information and knowledge as they will have more exposure to an adverse scenario.”
Cuattromo seemed to anticipate criticism from those who reject state regulations on the use of crypto assets. He said that “whenever financial crises erupt, we look back and see that this was going to end badly. However, the authorities said that they should regulate them, someone replied that they would kill innovation. They need to be careful.”
There is a Greater Adoption of Bitcoin and Other Cryptocurrencies in Argentina
There is a rapid devaluation of the Argentine peso (ARS), a history of “financial corralitos”, and restrictions on the purchase of foreign fiat currencies. These factors have led many inhabitants of Argentina to protect their assets in Bitcoin and other cryptocurrencies. For example, those who used to save in US dollars particularly appreciate stablecoins but can no longer do so due to foreign exchange restrictions.
One in ten FinTechs in the South American country is related to Bitcoin or blockchains. That is a sign of the great growth of the industry around crypto assets, according to a report by the Argentine Chamber of FinTech.
By Alexander Salazar
