In Argentina, rampant inflation is driving citizens to turn to cryptocurrencies to protect their savings. But the Central Bank of the Republic of Argentina has just banned online payment service providers from facilitating transactions in cryptocurrencies, such as Bitcoin, for their customers. The ban, justified by the need to reduce risk, seems more like an attempt to compete with cryptocurrencies as they gain popularity.
Argentina’s monetary authority takes steps to control the use of cryptocurrencies
As inflation in Argentina hovers near record highs, reaching nearly 100%, citizens are finding it difficult to use local currency to make transactions. Faced with this alarming situation, more and more people are turning to cryptocurrencies to protect their savings. However, the country’s monetary authority was quick to respond by opposing this trend.
The Central Bank of Argentina (BCRA) recently issued a statement prohibiting online payment service providers from offering bitcoin and other cryptocurrencies to their customers. This ban also extends to commercial platforms. The BCRA justified this decision by citing the need to reduce the risks associated with the cryptocurrency industry, but without providing a more detailed explanation.
Payment service providers that offer payment accounts may not carry out or facilitate transactions with digital assets, including crypto-assets, that are not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic (BCRA) to their customers.From the statement
The BCRA only allows transactions with regulated assets. This shows that the central bank seeks to encourage citizens to use traditional money. However, this measure only applies to centralized actors such as Mercado Libre, the Latin American e-commerce giant, which will no longer be able to offer cryptocurrency purchase options to Argentines. However, decentralized services will continue to exist, allowing Argentines to use cryptocurrencies.
It should be noted that over the past month, the country recorded an inflation rate of over 100%.. It is obvious that the central bank is trying to hide its monumental failure and is trying to attack the only currency that seems to be thriving in this country.
What is certain is that the monetary authorities would not be able to prevent the use of cryptocurrencies in Argentina. Several presidential candidates have already expressed their support for crypto as a unique way for citizens to get out of poverty. Furthermore, the travel agencies are already allowing Argentines to pay in crypto for their tickets.
Coming from a journalism university background, I came across Bitcoin and cryptocurrencies not long ago.
The potential of the Blockchain seduced me and I made it my research topic.