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Banks in Argentina Are Not Allowed to Offer Crypto Services

The IMF Asked Argentina to Not Allow Banks to Offer Crypto Services

The central bank of Argentina has stopped crypto operations for its clients. This decision came after the two other banks allowed crypto operations to their clients. These banks offering crypto purchases are Banco Galicia and the digital bank Burbank

The new rule of Argentina’s central bank bans all the possible crypto operations. The justification behind this decision looks to be the deal between the IMF and Argentina’s central bank made a month ago. The deal has to do with a loan of $45 billion. So, in order to return the loan, it is suggested that Argentina stop the use of cryptocurrencies

The statement reveals that the banks in the country are not allowed to provide operations with digital currencies that are not regulated. Following the official government statement, it notes that digital assets, including crypto assets and those whose returns are calculated based on the variations they register, are not regulated by the national authorities. That is why these services must not be handled by financial institutions. This was announced by Argentina’s central bank, known as the BCRA.

The Deal Between Argentina and IMF

The agreement between Argentina and the IMF is about a loan. As reported, the loan was acquired by the past government of Mauricio Macri in 2018. In order to return the loan back, the country had to pay back $19b in 2022 and $20 billion in 2023. In light of the official announcement, the bank emphasizes the possible risks regarding the use of digital currencies. The risks target the two pairs: users and financial institutions. 

According to the statement, a number of factors contribute to its volatility. The possible risks include the risk of operational disruption and cyberattacks, money laundering of terrorism and potential non-compliance with exchange regulations, the lack of safeguards and complete information that current regulations provide for users of financial services, and its cross-border nature.

In addition, according to the BCRA’s board of directors, this decision intends to reduce the risks associated with transactions involving these assets for financial service providers and the financial system as a whole.

Given these points, we can see the impact of the IMF on Argentina about crypto utility. The immediate decision of Argentina’s central bank shows the power of influence that IMF has. However, in the future, people who do not like the deal the IMF and Argentina made will have even more reason to question Argentina’s stance on cryptocurrency.

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