Argentina Enacts New Crypto Regulatory Framework Under President Milei

Javier Milei, an anarcho-capitalist and libertarian, became Argentina's president in December 2023. Initially seen as pro-Bitcoin and cryptocurrencies, the government has surprised many with increased regulations. The Comisión Nacional de Valores (CNV) has implemented a mandatory Registry of Virtual Asset Service Providers, requiring companies and individuals operating with crypto assets in Argentina to comply.

Argentina Unveils New Cryptocurrency Regulatory Framework Under President Javier Milei

Following the election of Javier Milei, an anarcho-capitalist and libertarian leader, as Argentina's president in December 2023, many anticipated that his economic and monetary policies would foster the country's adoption of Bitcoin and cryptocurrencies. However, recent developments suggest that the government is taking a more cautious approach.

In late March, the Comisión Nacional de Valores (CNV), Argentina's securities regulator, announced the establishment of a mandatory Registry of Virtual Asset Service Providers (VASPs) for entities operating with crypto assets within the country. This requirement, part of amendments to the existing regulatory framework, aims to address recommendations from the Financial Action Task Force (FATF), an intergovernmental body that sets standards for combating money laundering and terrorist financing.

The Registry will require companies and individuals offering cryptocurrency-related services, such as buying, selling, sending, receiving, lending, or trading, to complete the registration process. Both locally based and foreign firms operating in the Argentine market will be subject to this requirement.

"Those who are not registered will not be able to operate in the country," affirmed Roberto E. Silva, president of the CNV. Following the announcement, the CNV engaged in a meeting with major legal firms and the Fintech chamber to discuss the implementation of the Registry, with participation from representatives of local companies.

The move has been met with criticism from some sectors. Manuel Ferrari, member of Argentinian NGO Directive and co-founder of the Money On Chain protocol, argues that the Registry is an unnecessary interference in the cryptocurrency market.

"Bitcoin is money, not a security. It's preposterous to require currency exchange houses or gold shops to register with the CNV," Ferrari stated in an interview. "This benefits no one except state bureaucrats and an army of lawyers and people from the 'compliance industry.'"

Ferrari believes that the measure does not align with Milei's perceived pro-Bitcoin stance, emphasizing that Milei's party did not initiate the Registry proposal. Nicolas Bourbon, co-founder of payments solution KamiPay, echoed Ferrari's sentiments, highlighting that Milei's support is more general in nature, extending to any form of currency, including unconventional options like rocks or copper.

Both Ferrari and Bourbon view the Registry as a response to international pressure rather than a medida aimed at impacting users in the short term. This assessment is supported by Argentina's ranking as the 15th largest cryptocurrency market globally, according to Chainalysis' Global Crypto Adoption Index Top 20.

It remains to be seen how the new regulatory framework will impact the Argentine cryptocurrency market. While the Registry is intended to address money laundering concerns, it is likely to face scrutiny from those who believe it infringes upon the freedom to transact in cryptocurrencies. The outcome of this debate will have implications not only for Argentina but also for the wider cryptocurrency industry.