Argentina’s Central Bank Prohibits Banks from Offering Crypto Services

Argentina’s central bank on Thursday clarified in an announcement that regulated financial institutions within the country cannot facilitate clients to carry out operations with digital assets.

This notice came only days after two Argentinian private banks confirmed that they are offering cryptocurrency buying and selling services to their clients. One of these banks was Banco Galicia, which is the largest private lender in the country in terms of market value, and the other is Brubank, which launched regulated services locally in 2017.

“The measure ordered by the Board of Directors of the BCRA seeks to mitigate the risks associated with operations with these assets that could be generated for users of financial services and for the financial system as a whole,” the Central Bank of the Argentine Republic (BCRA) stated.

Both Banco Galicia and Brubank have to cease offering cryptocurrency services by Friday, according to crypto-focused publication Coindesk.

Crypto Assets Are Not Regulated

Additionally, the regulator highlighted that the crypto assets are not regulated by any Argentine regulator. It prohibits any regulated financial services providers in the country from offering services with cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

However, Argentina saw massive growth in the adoption of cryptocurrencies by the masses in recent years. It was mostly propelled by the rising inflation in the country.

However, the central bank of the country was keeping a strict stance against digital assets. It issued a warning last year highlighting the risks of cryptocurrencies, stating that “crypto-assets present risks and challenges for their users, investors and for the financial system as a whole.”

Last March, the Argentine central bank made its stance against digital assets more prominently when it entered into a $45 billion debt restructuring deal with the International Monetary Fund (IMF). Then, the government clarified that it would “discourage the use of cryptocurrencies with a view to preventing money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term, informality and disintermediation.”