The popularity of cryptocurrencies has peaked in Argentina since the rampant inflation and devaluation of the peso currency. Many Argentinian people turn to cryptocurrencies as a safety measure for their assets, and this is also prevalent in many countries like Argentina. But this option is now obstructed as the Argentinian Central Bank announced its new regulations regarding cryptocurrencies. This new regulation prohibits cryptocurrency transactions for any payment.
The Situation has Changed Upside Down
Cryptocurrencies rose in popularity in Argentina and were utilized in many fields, but these new regulations by the central bank curbed the popularity of cryptocurrencies and changed the situation. The Argentinian Central Bank now forces people and payment applications to abandon cryptocurrencies. Many applications will no longer be able to offer crypto services to their users. This includes payment fintechs and financial institutions also.
“This restriction measure aims to reduce the exposure of Argentina’s payment system to digital assets” the central bank claims. It is apparent that the Argentinian Central Bank employs these restrictions in order to govern the otherwise non-governable cryptocurrency field as it is seen as a risky initiative against the authority of the central banks.
What will the Argentinian Central Bank and the General Populace do?
These brand new regulations will highly affect cryptocurrency firms that are working in Argentina, and they will not be able to offer any services regarding cryptocurrencies in the country. These restrictions, however, will have more impact on certain fields and regions than others. As people who see the cryptocurrency sector as a safety measure against any type of devaluation or inflation are more prevalent in certain fields and regions. For instance, the province of San Luis has had its own stablecoin which is pegged to the US dollar and backed by some liquid financial assets. This stablecoin is accessible to the residents of this particular region.
These new regulations will also affect people who use stablecoins for their everyday transactions in Argentina, as some people were utilizing this technology to escape from the lately diminishing value and rates of peso currency. So, will cryptocurrency cease to exist in Argentina in the foreseeable future? The answer is not certain, as the Argentinian government is still trying to establish these restrictions widely. Maybe this harsh decision will be pulled back by the Argentinian Central Bank halfway through, or maybe it will prevail in the long run, or there will be a reform regarding the restrictions and a policy of balance will be suggested.
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