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Central Bank of Argentina Bans Local Institutions From Providing Crypto Services

Central Bank of Argentina Bans Local Institutions From Providing Crypto Services, Crypto Trading News
The Central Bank of the Argentine Republic (BCRA) banned domestic financial institutions from facilitating crypto opportunities. The announcement comes days after two of the largest local banks – Banco Galicia and Brubank – announced they will allow customers to buy digital assets through their official websites.

Argentina’s central bank blocks crypto offerings

Earlier this week, Argentina’s largest private bank by market value – Banco Galicia – and digital bank – Brubank – partnered with the cryptoWallet Lirium closed to offer cryptocurrency services to customers. Both parties cited the high user demand for digital assets as justification, especially among younger generations.

Nonetheless, the Central Bank of Argentina stated that domestic financial institutions are barred from offering such opportunities as the BCRA has still not imposed any regulations on the industry.

“The action, mandated by BCRA’s Board of Directors, aims to mitigate the risks associated with operations involving these assets that could pose to users of financial services and the financial system at large.”

Like many other central banks, the BCRA outlined some of the most talked about potential risks associated with digital assets. The institution held that Bitcoin and Altcoins are very volatile and could be used for money laundering and terrorist financing.

While most crypto assets are subject to significant price fluctuations, one could argue that they can easily be used in criminal operations. For one, the Blockchain of Bitcoin completely transparent, since transactions are recorded in the digital ledger and are visible to all participants.

On the other hand, cash could be untraceable and is still widely used for drug deals, gun financing, prostitution, etc.

Argentina is a good location for crypto

Despite the central bank’s tough stance, the digital asset sector has been thriving in Argentina for some time. The country, which has had an unstable economy in recent years, has been further hit by the COVID-19 pandemic. In late 2020, the financial crisis was booming to a point where many locals preferred to dive into the crypto market rather than keep their depreciating fiat currencies.

At the time, Binance’s Latin American team estimated that the number of new users in Argentina tripled in 12 months.

In addition, cheap electricity, the huge territory of Argentina and the suitable climate strengthened the local one Bitcoin mining-Sector.

Several cryptocurrency exchanges have noticed the trends and formed partnerships with the domestic sports sector. Last November, Bybit partnered with the Argentina Football Association (AFA) to become the global lead sponsor of the Argentina national football team. Shortly thereafter, Binance did the same.

Featured image courtesy of FT

Source: Crypto News Deutsch

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