Cryptocurrency industry stakeholders in Argentina are voicing concerns regarding a new draft regulation that proposes stringent restrictions on the operations of crypto institutions within the country. If approved, this draft will require each institution to register with a minimum capital amount to operate legally in Argentina.
Argentina is taking steps to enhance its cryptocurrency framework aimed at better protecting users of digital assets. The Comisión Nacional de Valores (CNV), Argentina’s securities regulator, has initiated a public consultation on a draft regulation for virtual asset service providers (VASPs).
This proposed regulation introduces new compliance requirements designed to bolster consumer protection and prevent illicit activities such as money laundering and terrorism financing.
If enacted, this resolution will mandate crypto companies to disclose all agreements with third parties and customers. It also aims to establish cybersecurity norms and policies, building on the VASP registry launched earlier this year.
One of the most contentious aspects of the draft is its classification of crypto companies, which includes a requirement for a minimum registered capital amount for operations:
Institutions involved in the transfer, custody, and management of virtual assets will need to maintain a minimum capital of approximately $173,000. However, individuals engaging in fiat-to-crypto and crypto-to-crypto exchanges will not need to form a company.
Members of the cryptocurrency industry have expressed cautious optimism about the proposed regulations. While they acknowledge the necessity of regulatory frameworks, they emphasize the importance of fostering an environment conducive to growth.
Carlos Peralta, Head of Public Affairs at Bitso Argentina, stated: “We deeply value that the review of the requirements for registration in the VASP registry is conducted through public consultation. This will contribute to financial inclusion and help build a faster and more efficient financial infrastructure.”
Juan Pablo Fridenberg, Director at Lemon, one of Argentina’s leading exchanges, echoed this sentiment: “Authorities understand that regulation must be intelligent and gradual. A framework that distorts or excessively burdens VASPs will drive users towards unregulated or cross-border alternatives.”
The proposed regulations come amid heightened scrutiny from international organizations regarding Argentina’s compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) standards. The CNV has emphasized that unregistered VASPs will not be permitted to operate in the country.
The regulatory landscape is evolving under President Javier Milei, who initially appeared supportive of cryptocurrencies but has faced criticism for implementing strict regulations that some view as counterproductive.
Argentina is grappling with severe economic challenges, including hyperinflation that reached an annual rate of 211.4% in 2023—the highest in over three decades. This economic instability has led many Argentinians to seek refuge in cryptocurrencies as a hedge against inflation.
