In Argentina, strong inflation and foreign exchange controls have led savers to put their money in the cryptographic world, creating cryptocurrency-specialized exchange offices that operate from the South American country.However, there is evidence that the Central Bank of the Argentine Republic is launching an attack on these exchanges.
The restrictions are beginning to reach the stock exchanges that operate with cryptocurrencies, They no longer limit themselves to requesting information via customer forms that work with cryptocurrencies, but are apparently placing new obstacles on it.
Know your client (KYC) guidelines, anti-money laundering and counter-terrorism policies are the main reasons given by the central bank for closing accounts at these bureaux de change.
In addition to this inconvenience, there is a technical problem, in Argentina a bank connection system was created for payments or transfers via QR code, for which companies that provide financial services must have a current account activated for this purpose.
The problem is that so far only the Industrial Bank has been the provider of the current accounts for these exchange offices, which allowed the use of one checking account in pesos and another in dollars, but with the KYC restrictions and other measures, these accounts will be closed and therefore ceased operations.
This situation has resulted in the exchange having more time to work with other financial institutions to continue operations, since at this point it will not be possible to start the process of opening new accounts that will allow the exchange between cryptocurrencies and local currency.
It is for this reason that cryptographic companies dedicated to exchanging currencies are showing an alarming concern as they fear that the cessation of business in the country is imminent.
The profitability of the companies devoted to this sector actually derive their profits from retail buying and selling cryptocurrencies, and when the current accounts of the exchanges are closed, these commissions disappear, reducing the company’s profitability.
This is an important point, local currency exchange offices need to be adjusted to allow users to access funds and withdraw them to other non-custody wallets to ensure timely access to their funds for savers.
Exchanges such as BuenBit have currently teamed up with the BKR wallet, which already has its virtual checking account and the QR code, in order to jointly bring a prepaid Mastercard onto the market. The difference between this fintech and other lesser-known ones is the capital it has available for such an investment.
It is estimated that there are at least 25 registered cryptocurrency trading companies in Argentina, with a total of around two million virtual accounts that are currently operated under central bank regulations.
It should be remembered that Argentina is among the top 5 Latin American countries with the highest acceptance of cryptocurrencies without having clear and precise legislation on cryptocurrency operations.
Uruguayan central bank proposes to regulate cryptocurrencies in the country
In fact, this nation’s Congress is expected to discuss a “Crypto Act”. and that has not yet begun, in which it is unofficially known that the companies engaged in cryptographic retailing will follow the guidelines dictated by the central bank and in compliance with regulations by the governing body that would be the National Securities Commission to be summarized as before.
The truth is that the president of the financial institution made statements to social media that cryptocurrencies on the exchange are not a good indicator for the market, so new restrictions are likely to continue
These changes in the rules of the game for cryptographic businesses come amid a new constraint on the financial dollar, Argentina has multiple dollar prices and different ways to access American currency, each time buying and selling leaves plenty of options open to saversAs a result, the cryptocurrency world has had a boom amid all these restrictions in the country, but this blow to the operation of exchanges will have a negative impact on this sector.