April 28, 2022

Argentina Halts Banks From Providing Crypto Offerings

Quick take:

  • It has been just four days since Argentina’s banks have begun offering crypto trading. 
  • The central bank seems to have put a barricade for the offerings now.

Only four days after two of Argentina's largest banks opened their doors to crypto trading, the central bank intervened to prevent the offers.

Argentina's central bank (BCRA) has placed a stop to financial institutions allowing crypto trading, just days after two of the country's major banks said they were considering it.

The BCRA announced the action on Thursday in order to reduce the dangers that crypto poses to consumers and "to the financial system as a whole", citing crypto's high volatility, usage in money laundering, and lack of regulatory protections.

Argentina’s banks recently opened up crypto trading

The news came after two of the country's largest banks, Banco Galicia and Brubank, announced on Monday that customers would be able to buy Bitcoin (BTC), Ether (ETH), USD Coin (USDC), and Ripple (XRP).

A poll conducted by Banco Galicia determined that 60 percent of respondents wanted more accessible access to digital currencies, prompting the decision to open crypto trading.

The central bank has long been skeptical about cryptocurrency. A public warning issued in May of 2021 covered the risks of cryptocurrencies,  citing worries about volatility and money laundering despite the fact that the bank said there were no indicators of "substantial levels of adoption and use."

According to research from Statista, in 2021, 21% of respondents in Argentina owned or used cryptocurrency, making it the world's sixth-highest rate of adoption and the highest in the Americas.

According to INDEC, Argentina's statistics department, inflation increased by 6.7 percent in March, the highest rate in 20 years, at 55.1 percent year over year. To combat rising inflation, some Argentinians have resorted to cryptocurrency. To combat inflation, one rural village started mining bitcoin in April.

The shift in focus from last May might be linked to the International Monetary Fund's (IMF) $44 billion extended loan plan, which included a condition requiring Argentina to "discourage the usage of cryptocurrencies."

Written by

Argentina Halts Banks From Providing Crypto Offerings

Vignesh Karunanidhi

Vignesh's crypto journey started in 2016 when his friend introduced him to the world of crypto. After completing his postgraduation in Commerce, he realized that crypto is his niche. Since then, he has written crypto content for various exchanges and startups. He is passionate about crypto writing and has recently started crypto journalism. Apart from writing, he loves languages and can speak over 5 languages.

Read more of this author's work

Get free Web3 content in your inbox

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.