• The issuer’s new measures will leave the crypto purchase and investment options launched this week by two Argentine banks without legal support.
• Banco Galicia said that it was waiting for information from BCRA before issuing an opinion.
• The bank reported also that clients’ money will be returned for cryptocurrency investments.

Banks in Argentina will no longer be allowed to facilitate or carry out transactions with cryptocurrency, per a mandate from the Central Bank of the Republic of Argentina. Two private banks had offered clients the option of trading or investing in digital currencies days earlier.

According to Ambito.com news site, BCRA, regulation released on Thursday, 5th of April, also includes unregulated cryptocurrency assets whose yields can be determined using the variations that they register.

Galicia, the nation’s largest bank, and Brubank both announced that they will begin to offer digital currency services earlier this week. Galicia chose to use Liechtenstein-based cryptocurrency platform Lirium.

BCRA Board’s proposal “seeks mitigation of risks associated operations with assets that could be created for users financial services and the financial system in general.”
Meanwhile, Banco Galicia is waiting to receive the official regulations of the monetary authority in order “to analyze it in detail,” Ambito reported, citing sources from the Central Bank.

Director of the banking institution clarified that clients who have operated in crypto assets at Banco Galicia won’t lose their money.
BCRA reminded banks that they had a mission to serve the country. It pointed out that the bank’s activities must be directed at funding investment, production and consumption.

According to the Argentine issuer, the banks and actors that use cryptocurrencies in their operations “may not have been established in Argentina which could lead to deviations from general regulations.”

Flipside

• A document was published by the Central Bank (CNV), the National Securities Commission, and the National Bank (CNV) one year ago to warn users about the potential risks and implications of cryptocurrency trading.
• Blockchain technology is an important tool for improving financial system efficiency. It is still hesitant to permit the private use of digital currency.
• As part of a deal to refinance foreign debts, the IMF asked Argentina’s government recently to stop using cryptocurrencies.

Why you should care

• Argentine banks must comply with the Central Bank’s measures. Therefore, it is likely that Galicia as well as Brubank will need to rescind any crypto plans.

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