Since the adoption of Bitcoin as a legal tender in El Salvador last year, several Latin American countries are planning to make similar changes. However, it seems that Argentina is planning to become the first Latin American nation to defy the crypto-friendly stance in the region. As the local media reports, the Central Bank of Argentina is recently in the process of imposing a crypto-related ban in the region.
The BCRA or Bank Central of the Republic of Argentine has recently issued a new legal narrative that prevents the local organizations from providing crypto-related services to the masses. Any locally owned business, financial enterprise, or commercial enterprise cannot offer crypto-related services. The announcement was made shortly after two major banks in the region named, Brubank and Banco Galicia, declared the start of a new cryptocurrency service through their websites.
According to the local media news, the Banco Galicia and Brubank partnered with a third-party cryptocurrency services provider called Lirium. Both native banking organizations used the statistics that revealed increasing demand for cryptocurrency trading in the region. The generation that is showing the biggest interest in investing is from the Gen-Z strata.
Despite citing sanctions on the cryptocurrency-related services in the region, BCRA has not cited any signs of research on the impact of digital trading in the region or issued any statements about regulations on the nascent industry. BCRA cites that the Board of Directors and the management of the Central Bank are trying to mitigate the risks that are associated with the new asset class.
BRCA Calls Labels Bitcoin as High-risk Asset Class
BRCA officials have gone on to claim that cryptocurrencies like Bitcoin and other altcoins are highly volatile assets and also issued their reservations about the high probability of money laundering and terrorist financing schemes attached to the industry. Regardless of the restrictions imposed by BRCA on cryptocurrency trading, the digital asset market is showing a continuous growth trend in the sector.
The onslaught of COVID variants and new waves has made a heavy impact on the economies like Argentina, which heavily depends on revenues from the tourism sector. The Binance branch of Argentina projected a threefold increase in cryptocurrency traders last year. Factors like cheap electricity and affordable real estate make Argentina an ideal spot for Bitcoin miners and other cryptocurrency-related organizations. ByBit and Binance already signed sponsorship deals with Argentina Football Association last year.