Welcome Readers to the next chapter of my writing series, ‘The Cryptocurrency Breakthrough 2020 – Synopsis 20’ – Cryptocurrency Regulations in Argentina.
The number of users registered on different cryptocurrency platforms has grown rapidly in Argentina. There are currently 55 cryptocurrency companies in Argentina and many more have shown their urge to operate.
On the other hand, the blockchain companies in Argentina have grown by 10% in the past year. Blockchain is now one of the four main topics of the Central Bank of the Republic of Argentina’s (CBRA) remit. Blockchain in Argentina has the potential to tackle many problems.
Government’s viewpoint on Cryptocurrencies
The government of Argentina’s frame of mind has been with the issuance of regulations related to taxes and prevention of money laundering and financing of terrorism. The regulatory bodies in Argentina the cryptocurrencies like Bitcoin is defined as
‘A digital representation of the value that can be digitally traded and functions as a medium of exchange; and/or a unit of account; and/or store of value, but does not have legal tender status in any jurisdiction and is neither issued nor guaranteed by any government or jurisdiction.’
Although cryptocurrencies are not specifically regulated, they come under the Civil Code of Argentina Recently, the Central Bank of Argentina (BCRA) conducted a test on blockchain-based clearing system that could be used by the country’s big financial systems.
Cryptocurrencies Law in Argentina
The Argentina Government has not imposed any specific rules or regulations on exchanges, issuance or use of digital assets. The National Securities Commission (CNV) clarified that ICO’s would not be subjected to regulations regarding the capital markets. It also stated that certain ICO’s may be controlled by CNV depending on their structure and characteristics.
At present, there are no specific regulations on exchanges activities. However, anyone who wants to publicly offer exchange operations, then obtaining a licence is from CNV is mandatory.
Laws Implemented on Cryptocurrencies
Anti-Money Laundering Laws
The AML law lists a number of persons, brokers-dealers, credit card companies, insurance companies etc, who require to oblige with the Know-your-customer (KYC) process. They are also required to report suspicious transactions to the Financial Information Unit (UIF).
Financial Information Unit(UIF)
Financial Information Unit of Ministry of Finance requires individuals and the cryptocurrency entities to report suspicious transactions involving money laundering or terrorism financing. It differentiates electronic currency from digital currency on the basis of involvement of legal tenders in the transactions.
Taxation and Mining
Tax Policies on Cryptocurrencies
Argentina’s financial regulator, the Federal Administration of Public Revenue is responsible for tax policies in the country. It published tax policy which is effective till today according to which, the crypto exchanges in the country must provide details of account holders wallet balances on a monthly basis which should be in Argentine pesos. However, there is no clear direction on the tax policies on the crypto gains at present.
Mining cryptocurrencies is permitted in Argentina and there are no specific rules or regulations on crypto mining at present.
Series of Events
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 included 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.
Wrapping it up!!!
Blockchain and cryptocurrency is showing steady growth despite unfavourable conditions of the market.