Argentina has just rolled out a new regulatory framework to regulate the use of cryptocurrencies within the region. The new regulation focuses on payment companies and financial operators that deal in cryptocurrencies.
The tax authority in the region (AFIP) has published a release that requires cryptocurrency exchanges within the region to submit a monthly report on their users’ data.
This decision came after the Central Bank of Argentina previously issued a new ruling that required banks in the region to compile and provide a list of their customers who have in one time or the other made transactions in cryptocurrencies.
Information of individuals that held crypto assets, traded cryptocurrencies and engaged in crypto payments were as well demanded by the bank last month, April, 2021. Details of the third parties that facilitated the crypto payments were also required by the bank.
The new regulatory framework is targeted at non-bank financial operators as well as financial payment facilitators and firms. The concerned firms are to compile the total transactions made by users, the available balances and of course a comprehensive list of the users on their platform.
Reason for the Decision
The government of Argentina under the rule of President Fernandez is trying to curb tax evasion, outflow of capital as well as the devaluation of the Argentina Peso. Cryptocurrencies can evade tax and can reduce the outflow of capital because it facilitates cross border transactions with little fees. The attention of regulators would definitely be drawn to it.
A similar move was made in Turkey as the government banned use of crypto as a payment option; a move to protect the currency of the country.
There were hints that the reduction in the remittance from abroad made the central bank of Nigeria follow similar suit by restricting banks from facilitating cryptocurrency payments in the region. Bank accounts that dealt in cryptocurrencies were reportedly closed.
Despite the ban, the use of cryptocurrencies is on the rise by the day. P2P platforms volumes are increasing. Is this a fight the regulators can win?
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