Cryptocurrency Regulations in Argentina

An exponential rise in the usage of cryptocurrency in Argentina, IT is estimated that over 1.3 million people currently use crypto in Argentina and 2.94% of its population is now adopted crypto. Since 2019 the temperature of crypto in the country is been rising continuously by creating a timeline for Bitcoin acceptance and other alternative assets. 

Argentina exercises strict controls over foreign currencies, in part to protect the country from inflation and to circumvent prohibitions and transfers of foreign currency outside its borders. Argentina adopts cryptocurrency.

Argentina served as a regional leader in the area of cryptocurrency. Cryptocurrency in Argentina is not legal currency, since they are not issued by government monetary authority and are not a legal tender in Argentina. Only the Central Bank of Argentina has the authority to issue legal currency in the country.

Argentina Crypto Regulations 2022

19-04-2022: Adoption in Argentina grows according to Americas Market Intelligence.

According to the survey and data sourced from Americas Market Intelligence Argentinians are very interested in virtual currencies, whereas more than one out of ten Argentinians are having one or the other kind of crypto investments. further 18% Argentinians are interested in buying crypto in the future.

19-04-2022: New anti-Crypto Austerity Regime by IMF crafts Argentina.

The International Monetary Fund (IMF) after two years of wrangling approves a new $45 million refinancing agreement with Argentina. By offering Argentina a much-needed reprieve from debt payments until 2026, the IMF sweetened the deal. 

19-04-2022: Argentina uses Lemon a Crypto app or Card in Argentina to support ETH,USDT, DAI, and supports BTC

Argentina bitcoin exchange Lemon cash launched a Visa card offering a 2% cashback in BTC for each transaction. Users can buy everyday consumer items at any merchant which accepts Visa by using international cards. Lemon converts the cryptocurrency amount from the user’s account into Argentinian pesos to make a payment.

18-04-2022: Argentina Securities Regulator launches innovation hub to discuss regulated crypto investments.

The Argentinian Securities regulator The National Securities Commission (CNV), is reportedly taking action to streamline the arrival of new fintech and crypto-based investment instruments to the market.

13-04-2022: When in Doubt, Choose Crypto.

A town called Sorradino in Argentina’s efforts to beat inflation by upgrading infrastructure may soon be mining virtual currency, The mayor of the town claims to pay tax on crypto mining profits. The town with 6000 people has already acquired six graphic cards and will be purchasing a mining rig very soon.

Government stance on Cryptocurrencies

Crypto in Argentina is not prohibited and is considered legal and hence regulated by the government regarding cryptocurrency-related to taxation and to prevent money laundering and financial terrorism.

There are no specific regulations implied on the issuance, exchange, or use of cryptocurrency. There are currently several laws aimed at institutionalizing and regulating different cryptocurrency aspects and the crypto industry.

Cryptocurrencies and other tokens, securities laws, and investment laws have no specific regulations in Argentina. Under Argentina Lwa Bitcoins are not classified as securities, securities are essentially negotiable instruments in which the issue incorporates credit rights. 

The National Securities Commission has issued a communique to warn investors on initial coin offerings (ICOs) of their potential risks. The CNV has also clarified that certain ICOs may be subject to the control of the CNV, based on their characteristics and structure. CNV with Argentina Central Bank together has issued a joint statement to warn about the risks and implications of using and investing in crypto assets, in MAy 2021.

Cryptocurrency in Argentina such as Bitcoin defined by UIF as a digital representation of value that can be used to trade digitally functioning as a medium of exchange, a unit of account, and to store a value but does not have a legal tender on jurisdiction and in neither issue or guaranteed by any government or jurisdiction in Argentina. 

The AML law lists a number of persons, brokers-dealers, credit card companies, insurance companies, etc, who are required to comply with the Know-your-customer (KYC) process. They are also required to report suspicious transactions to the Financial Information Unit (UIF). 

Taxation of Crypto in Argentina

If the issuer is resident, established, or located in Argentina the income derived from the holdings or disposal of virtual currency is considered to be from an Argentina source. IF the issue resides, is established, or is located outside Argentina then the income will be considered a foreign source.

Argentina-source gains are derived depending on resident individuals of Argentina and non-resident individuals of Argentina. GAins obtained by resident individuals from the disposal of digital currency fall under 15% of scheduled tax. Residents legal entities’ tax will be ranging from 25 to 30 percent upon any gains derived from the holding or disposal of digital currency at a general, progressive, income tax rate.

Worldwide assets of Argentina’s individual residents are subject to personal tax at a rate varying from 0.5% to 1.25% based on overall asset value exceeding tax allowance. IF The assets of an individual are located abroad, the applicable rates are a little higher varying from 0.7% to 2.25%. In addition transfer or exchange of Virtual currency is not subjected to VAlue added tax in Argentina.    

Cryptocurrency Mining in Argentina

Mining cryptocurrencies is permitted in Argentina and there are no specific rules or regulations on crypto mining at present.

Crypto mining booms on cheap subsidized energy in Argentina. A town called Serodino with 6,000 residents of Argentina is looking to upgrade its rail infrastructure funding by crypto mining. The town has begun purchasing graphic cards and mining equipment to generate income via crypto mining to gather funds for upgrading its rail infrastructure. The minted cryptocurrencies are then converted into Argentina’s fiat currency to finance some infrastructural renovations.  

Historical Events & Announcements

18-11-2021:Crypto sales and purchases are subject to the tax of up to 0.6% on banking debits and credits. Argentina updates its “check tax” rules to clarify crypto exchanges are not exempted.

23-04-2020:- The Central Bank of Argentina joined hands with IOV labs, a Bitcoin startup to work on the blockchain-based payment network.

26-11-2019:- Argentina introduces new Tax rules and includes 11 new cryptos in its authorized cryptocurrency list allowed to trade.

01-11-2019:- The Central Bank bans the purchase of Bitcoins using credit cards to preserve the country’s foreign exchange reserves.

07-02-2019:- Public transport in Argentina got access to receive payments in Bitcoin. The customers already use a national contactless smart card which can be loaded with Bitcoins. 

Conclusion

Argentina’s Economic downturn has fueled the crypto craze in Argentina. Downturn with high inflation in Argentina’s economy and a deflating currency and a shortage of US dollars has proved a shot in the cryptocurrency sector. The number of user accounts for investing in cryptos has been multiplied by ten in Argentina by putting their money into Bitcoin, Tether, Ethereum, or Dai.