Argentina has taken a significant step in the regulation of the cryptocurrency industry by requiring all local crypto firms to register with the newly established regulatory body dedicated to the sector. Failure to comply with this requirement could result in these firms being forced to cease operating entirely. The decision comes after the nation’s senate passed legislation on March 14, approving the Registry of Virtual Asset Service Providers. This move is in alignment with recommendations from the Financial Action Task Force.
The National Securities Commission (CNV) of Argentina made the official announcement regarding the creation of the registry on March 26. The purpose of these regulations is to identify both the human and legal entities that offer services related to cryptoassets within the country. This includes businesses that facilitate activities such as buying, selling, trading, lending, sending, or receiving cryptocurrency. CNV President Roberto E. Silva emphasized that those who fail to register will not be permitted to operate in Argentina.
The primary goal of implementing these regulations is to enhance compliance with anti-money laundering and terrorist financing laws. This agenda aligns with the objectives of many crypto watchdogs in the United States and other jurisdictions. The move towards stricter regulation in Argentina has surprised many industry leaders, particularly given the libertarian stance of the nation’s new leader, Javier Milei.
Despite being known for his support of small-government libertarianism, Javier Milei’s endorsement of the regulatory measures has raised eyebrows within the crypto industry. Bull Bitcoin CEO Francis Pouliot expressed his confusion by highlighting Milei’s unexpected pivot towards regulation. The crypto industry initially viewed Milei as an ally due to his shared criticism of central banking, but his recent actions have contradicted this perception.
While anti-money laundering (AML) regulations within the crypto industry are commonplace, the decision to create a registry specifically for Bitcoin exchange platforms has generated mixed reactions. Manuel Ferrari, co-founder of the Money On Chain protocol, criticized the move, referring to it as a “terrible idea.” He argued that Bitcoin should be treated as money and not as a security, likening the registration requirement to an unreasonable imposition on currency exchange and gold trading businesses.
In a separate development, Argentina’s minister of foreign affairs announced in December that the nation had eliminated its legal tender laws. This change allows contracts and payments to be settled in any currency, including Bitcoin. Consequently, many Argentine citizens turned to Bitcoin as a hedge against the rapid depreciation of the national currency. The Argentine peso has been grappling with an annual inflation rate of 276% as of February, prompting individuals to seek alternative store-of-value options like Bitcoin.
Argentina’s recent regulatory initiatives reflect a growing trend of governments worldwide seeking to impose stricter oversight on the cryptocurrency industry. The decision to create a registry for virtual asset service providers underscores the authorities’ commitment to combatting illicit financial activities within the sector. While these measures may create challenges for crypto firms operating in Argentina, they also signal a broader shift towards regulatory clarity and compliance in the evolving landscape of digital assets.
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