Argentina's Central Bank Takes Action to Address Risks of Crypto Transactions
BCRA urges payment providers to stop supporting unregulated digital assets amid currency devaluation concerns
Tue, 09 May 2023, 14:42 pm UTC
Argentina's central bank is taking action to address increasing concerns about crypto-asset transactions. The bank has urged payment service providers in the nation to stop supporting such activities.
The Argentine Central Bank (BCRA) released a statement highlighting its concerns about unregulated digital assets. It emphasized that payment providers must adhere to the guidelines set by the appropriate national authority. The decision comes as the country's currency experiences severe debasement, with the Argentine peso losing over 98% of its value versus the US dollar, according to the government-approved exchange rate.
Meanwhile, Bitcoin (BTC) has seen an unprecedented surge in value when valued in the Argentine peso. As a result, the central bank has taken action to protect citizens from the potential risks associated with cryptocurrency usage.
The BCRA aims to safeguard financial service users and the national payment system from the hazards that transactions involving crypto assets could pose. This new regulation aligns the rules for payment service providers offering payment accounts with those that financial institutions must adhere to. Similar restrictions have already been imposed on financial institutions since May 2022.
The regulatory move by the BCRA is expected to help curb the growth of the crypto market in Argentina. However, it remains to be seen how effective these measures will be in the long run, especially given the rising demand for cryptocurrencies in the country. Nonetheless, the Central Bank of Argentina's move is a crucial step towards ensuring financial stability in the country amidst currency devaluation concerns.
Meanwhile, Argentina is facing financial situations that are putting citizens on edge, especially with high taxes and the devaluation of the Argentine peso. The use of cryptocurrency could help people, especially with remittance, but with the central bank restricting its use, the crypto market and a more stable payment option are currently experiencing uncertainty in the nation.
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