• All evidence suggests that the answer is yes. The government must raise additional money to fulfill its external and internal obligations after it has reached an agreement with the IMF.
• The country’s cryptocurrency sector is a major one, with around 25% of all Argentine savings represented and 17% abroad.

Argentina, following the January agreement with the International Monetary Fund to refinance its external debt service will need to implement a plan of fiscal and monetary adjustments in order to raise its income to 2025.

To achieve their objectives, the government will consider increasing the provision and tax on. It would impact all bitcoin and other crypto-currencies holders in South American countries.

To meet its obligations derived from a 57.1 billion dollar debt acquired by the Fund during the Administration of Mauricio Maduro, the government had to agree to a financial agreement with the Fund.

Argentina had to pay some $2.8 billion to the IMF due in March, for which the government of President Alberto Fernández had to request an extension of the payment term, given that the country does not have the necessary financial resources.

The government faces challenges

Talks and agreements made with the Fund prompted a number of protests by different sectors of the Argentine Left that supported the government but opposed any agreement with them.

Even Máximo Kirchner, son of Argentine Vice President Cristina Fernández and representative of the government coalition in parliament, broke with the Alberto Fernández administration by opposing the $44.5 billion refinancing agreement signed with the Fund.

In the next two and a half years, the Fernández administration will have to introduce a series of structural changes in its economic, monetary and financial policy in order to save foreign currency and raise tax revenues.

These measures include a reduction in the issue of unsupported money and a decrease in public spending. They also strengthen tax administration, by increasing revenues and tax evasion.

Crypto industry: Eyes open

Here is where crypto can be a significant player in capturing exceptional income for the weakened Argentine treasury.

According to Chainalysis (a company that specializes in blockchain data, this sector has a current value of 68,000,000,000 million dollars. This figure represents 25% of the total Argentine money that has not been registered in the national system of financial services and 17% the foreign assets.

Argentina is also among the 10 most popular countries to adopt cryptocurrency worldwide. This is higher than Venezuela with approximately $28,000 worth of cryptocurrencies, and only surpassed in terms of total cryptocurrency adoption by Brazil, at $90.9 billion. Kim Grauer (Director for Research at Chainalysis), spoke to the iProUP news website.

The Argentine Congress has more plans to regulate cryptocurrencies, and other digital assets. They are still open for discussion and need approval. Miguel Pesce (Central Bank President) supports more regulation of digital currency.

The Flipside

• Bitcoin and other digital assets could be a lifeline for Argentina’s precarious finances.
• Recent years have seen the Central Bank of the Argentine Republic burn huge sums of money to help the peso.
• Expect tighter controls by the tax regulator on trading and owning cryptocurrencies.

BTC users and other cryptocurrency operators pay already two taxes to the nation’s treasury. Personal property and income tax.

On the other hand, some provinces such as Tucumán, Córdoba, Entre Ríos and Catamarca, began to charge additional taxes on the gross income generated by trading cryptocurrencies.

Why you should care

• It is common to scam cryptocurrency transactions around the globe. Countries are increasingly looking for ways to boost their incomes to fund their spending, and crypto is one of the reasons governments have legalized it.

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