Argentina Sets New Regulatory Requirements for Crypto Exchanges
The President of the regulatory agency in Argentina recently noted that unlicensed crypto firms in the region will not be able to operate. A Cointelegraph article reported on 2nd April that President Roberto Silva claimed that virtual asset services providers operating in the country without a registration license will not be able to continue operations.
The government of the nation is working on mandating registration for all crypto firms within its jurisdiction.
On 25th March, the CNV of Argentina the biggest securities regulatory agency in the region stated that virtual asset services providers are to comply with FATF recommendations.
On this account, any firm in the country offering crypto services has to register with the regulator as part of the Anti-Money Laundering (AML) and Combatting the Finance of Terrorism (CFT) laws. These laws will impact cryptocurrency service providers starting from 14th March.
The Senate of Argentina will modify laws to prevent money laundering and terror financing within the region. President Silva noted that if virtual asset service providers are not registered and won’t be able to keep operating.
The regulatory amendments made a significant impact on local cryptocurrency investors before the Javier Mileir won the presidential elections in 2023.
Pro-Bitcoin President
Cryptocurrency investors in the country expressed optimism after the appointment of Milei at the president’s office on account of his pro-Bitcoin stance. However, the recent decision to implement the FATF laws on the crypto industry in Argentina has sparked controversy and criticism from local players regarding the future of the sector in the region.
Strike, a popular Lightning Network platform operating out of Argentina to facilitate Bitcoin payments reported comments from its users. These comments indicate that that the application does not allow the locals to make fiat deposits in their bank accounts.
Thus far, it is not clear how these requirements can impact businesses that are operational in the nation.
In December 2023, the minister of foreign affairs allowed contract settlement in the form of Bitcoin and other cryptocurrencies. President Milei addressed the public on 2nd April on account of the Malvinas Day Memorial.
An article published on 23rd March in Cointelegraph indicates that Bitcoin demand among Argentinian investors reached highest in 2 years.
Bitcoin Demand in Argentina Rises to Highest Levels in 2 Years
The article reveals that Bitcoin conversions from local fiat continued to incline. The article attributed the rising demand to the continuous decline in pesos against USD going from $0.0049/peso in March 2023 to $0.0012/pesos this year.
The efforts of the local government to preserve national savings during the ongoing fiat devaluation led to local Bitcoin demands reaching to highest levels in 20 months.
On 20th March, Bloomberg cited data sources from Lemon Cash exchange indicating around 35K investors in Argentina purchasing Bitcoin within a week. The purchase doubled the usual weekly average for Bitcoin purchases in comparison to last year.
An important factor for sudden plateau is cited to be local fiat depreciation. On the YTD scale, the value of pesos against USD weakened at a consistent rate.
Statistics indicated that Lemon Cash was not the only platform that reported Bitcoin demand surges. Multiple exchanges operating in the region such as Belo and Ripio reported the same trends. Belo a digital wallet services provider in Argentina noted that the stablecoin purchases in the country declined from 70% to 60% with more capital inflows taking place in Bitcoin.
Rising Bitcoin Demand Among Argentinian Investors
Belo CEO Manuel Beaudroi noted that the majority of account holders showed an interest in investing in Bitcoin during the price surge. However, stablecoins inflows remained balanced and reserved for transactional utility or as a vehicle for remittances.
He further stated that the trading volumes on Belo for Bitcoin and Ethereum surged by tenfolds in 2024 compared to the same time last year. Meanwhile, another report suggests that stablecoin investments are still surging. The report noticed that investors from Argentina can still purchase stablecoins outside of popular exchange platforms in the nation that affect the total reported stablecoin volume.
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