The Argentinian Central Bank has created a new set of rules that affect people and businesses that bought cryptocurrency. They did it to protect against the value of their currency going down. The bank will only sell dollars at an official rate to people and companies that haven’t bought crypto in the last 90 days. This is to stop the exchange rate from going up.
Argentine crypto users can’t buy dollars on official markets
The government of Argentina is trying to stop the exchange rate of the “blue dollar.” Consequently, this will help the price of the U.S. dollar in informal markets in the country from going down. This has been happening for a few weeks. The Argentine Central Bank has decided that companies and people who have bought cryptocurrencies can’t get dollars at the official rate.
The message, which has the number 7552, says that people and businesses will be able to access the official dollar markets if they:
”Have not delivered funds in local currency or other local assets (except funds in foreign currency deposited in local financial entities) to any human or legal person, resident or non-resident, related or not, receiving as prior or subsequent consideration, directly or indirectly, by itself or through a related, controlled or controlling entity, foreign assets, crypto assets or securities deposited abroad.
Before you can buy dollars on the official market, you’ll need to meet these restrictions. You’ll have 90 days to do this.
Closing the Loophole and Local Responses
Local sources say that the new restrictions aim is to close a loophole. A loophole that some organizations use to their advantage. These organizations use the exchange control channels to buy cheap dollars at the official rate. Then they use these dollars to purchase cryptocurrencies to sell them at a higher rate. The Argentinian Central Bank also established a new rule that says people who buy these dollars can’t buy any cryptocurrency for 90 days after the transaction. This rule was put in place to prevent the situations described above.
The goal is to stop money from leaving the country, which is easy to do with dollars and cryptocurrency. A person or company has pesos in their account and uses them to buy U.S. dollars from a regulated exchange. They can use those dollars to invest in cryptocurrencies like Bitcoin.
This would mean that U.S. dollars would leave the country, which would hurt the economy of Argentina. In the South American country, which has the third largest economy in Latin America, President Alberto Fernandez’s center-left government is tightening currency controls and raising interest rates to control inflation.
Most Argentinians didn’t like it, and some questioned how well it would work. An economist, Agustin Monteverde, said this measure didn’t make sense. He told me:
”The measure is arbitrary and discretionary. It is not understood why whoever bought a certain merchandise (because that is what cryptos are) cannot access the exchange market”
The measure went into effect on July 22, and Argentinians are already trying to switch from traditional exchanges, where crypto transactions have to be made public, to peer-to-peer interactions, where transactions between two parties can be kept private.
Conclusion
Argentina’s inflation rate is one of the highest in the world. The central bank says that the country in South America has an annual inflation rate of 64% right now. That’s the second-highest rate in the region, after Venezuela, which has the highest inflation rate in the world and is in the middle of many problems.
The largest bank in Argentina, Banco Galicia in Buenos Aires, started selling Bitcoin, Ethereum, USD Coin, and XRP to customers in May. This service might not be as popular now that the central bank has put new restrictions.
