By
Bhushan Akolkar
January 16th, 2024
Available data shows that people in Argentine now resort to crypto due to the falling value of the country’s national fiat currency and the rising inflation.
The Senate committee of Argentine has voted against crypto use in the country based on a letter of intent the government had agreed with the International Monetary Fund (IMF) on a $45 billion debt restructuring deal
The Argentine Government developed a structure with goals for the period between 2022 and 2024, focusing on policies that would help facilitate the growth of the South American country.
However, it was revealed that the country’s agreement contained certain clauses that would make the government discourage the use of crypto.
Per IMF, Argentina can ensure financial stability through the following process:
- Discourage the use of crypto-currencies with a view to preventing money laundering, informality, and disintermediation
- Support the current process of digitization of payments to improve the efficiency and costs of payments systems and cash management
- Safeguard financial consumer protection.
Available data shows that people in Argentine now resort to crypto due to the falling value of the country’s national fiat currency and the rising inflation. Apart from that, crypto adoption has grown to new highs in Latin America especially as the region has had to deal with dwindling fortunes.
One would expect the country’s legislature to reject such requests but a Reuters report has revealed that the country’s Senate has approved the debt deal so as to avoid a messy default. Notably, the lower chamber on March 11 also approved the deal.
Crypto Stakeholders Decry Argentina’s Government Move
Stakeholders in Argentine’s crypto community like the ONG Bitcoin Argentina NGO have tried to understand the government’s position on why it would look to discourage crypto usage within the country.
The NGO, on March 10, had filed a public information request with the economic minister to provide documents, and other documentation that have evaluated cryptocurrencies and how they relate to negotiations with the IMF.
According to the NGO’s Executive Director, Javier Madariaga, the Argentine government could instead positively use the massive crypto adoption within the country to its advantage instead of the current path it has chosen.
He stated:
“We are convinced that the path is neither disincentives nor prohibition, but to work in a coordinated manner with the private and public sectors to take advantage of the potential of decentralized finance, so that more and more individuals can transact in a secure manner and security forces can improve their abilities to combat cybercriminals. It worries us that the authorities are agreeing to disincentivize a technology that the population itself has already massively adopted, instead of unleashing its potential to address historic problems.”
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