Almost two months after requesting the Ministry of Economy access to public information on the details of the agreement with the International Monetary Fund (IMF), the NGO Bitcoin Argentina receives a response from the Central Bank (BCRA).
The BCRA had to respond to the request after the Ministry of Economy assigned this responsibility to it. This, after a formal injunction that the NGO Bitcoin Argentina made for administrative silence.
According to what the BCRA indicates in a document dated April 25, discouraging the use of cryptocurrencies is not the main objective of the agreement signed with the IMF.
The organization explains that the reference to cryptoactives included in the Memorandum of Economic and Financial Policies, which is part of the so-called “Strengthening financial resilience” policies of the agreement, it is not the axis of the program to be implemented.
It is worth remembering that the technical document that supports the agreement with the IMF contains a section whose first objective is to “discourage the use of cryptocurrencies with a view to preventing money laundering, informality, and disintermediation.”
It was precisely that phrase that set off the alarms among Argentine bitcoiners and the one that motivated the NGO to request official information.
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Hence, one of the questions sent to the government asked to know why the use of cryptocurrencies is discouraged. As CriptoNoticias reported, at that time the fact that Argentina became the first country to commit to applying anti-Bitcoin measures.
Why discourage the use of cryptocurrencies? “Because of its risks,” says the BCRA
To expose the reasons that would lead it to discourage the use of crypto assets in the South American country, the Central Bank reviews its position on cryptocurrencies. It shows the sector as part of the sources of risk and potential vulnerabilities of the local financial system that, in his opinion, must be “monitored constantly”.
Added to these observations is the absence of safeguards and the fact that cryptocurrencies “are exposed to operational disruptions and cyberattacks.”
In its text, the BCRA places special emphasis on the alleged risks of using cryptocurrencies for money laundering and terrorist financing. This, considering “the cross-border nature of these assets, the fact that they are not considered legal tender, the high levels of volatility in their prices and the variable levels of support in fiduciary currency,” according to what it states.
To argue its position, the Bank refers to reports from various international organizationssuch as the Bank for International Settlements (BIS), the Financial Action Task Force (FATF), the Financial Stability Board (FSB) and the IMF itself.
These are studies that support the matrix of opinion that shows cryptocurrencies as dangerous assets for the stability of the international financial system.
It is based on these materials that the Argentine entity writes the following:
The BCRA has adopted an approach based on prudence, obtained from the constant follow-up and monitoring of international experiences, discussions and publications in global forums and organizations and other public information sources specialized in the matter. In this sense, this Institution published a document with the objective of providing information and warning about possible implications and risks that crypto assets may carry, as well as recommending a prudent attitude in order to mitigate a possible source of vulnerability for users and investors.
Central Bank of the Argentine Republic.
The Central Bank’s proposals may contradict the results of other investigations -many of them published in this medium- that indicate that the use of cryptocurrencies in illicit activities is not so significant.
Only in 2021 only 0.15% of operations that were made with cryptocurrencies were associated with some illicit activity, such as fraud or money laundering, bounded the NGO Bitcoin Argentina in its request for information. These are “percentages much lower than those presented in transactions made with fiat money.”
On the other hand, although the Bank’s letter minimizes the sector, saying that cryptocurrencies “do not show significant levels of acceptance and use in Argentina”, it recognizes the speed of developments and the interest they arouse.
An idea that contradicts the vision of the Argentine ecosystem as one of the largest and most active bitcoiner communities in Latin America, with a market valued at more than USD 68,000 million.
Regarding the measures that would be taken to “discourage the use of cryptocurrencies”, no action required specific.
They just reiterate that will maintain a vigilant attitude“adopting measures to reduce uncertainty and anchor exchange rate expectations (…) in addition to reconfiguring its monetary policy instruments to accompany the recovery process and reinforce monetary, exchange rate and financial stability.”
A positive message, according to the NGO Bitcoin Argentina
In a message posted on his Twitter account this April 27, the NGO Bitcoin Argentina rated the BCRA’s response to its request as positivenoting that there is still much work ahead within the ecosystem.
In its tweet, the NGO shares the document with the public and adds that “as a community we must join forces and collaborate so that more and more people and institutions understand the potential of Bitcoin blockchain and the crypto industry.”