The president of the Central Bank of Argentina (BCRA) said he hopes to regulate Bitcoin soon, mainly at the intersection with the foreign exchange market. and local payment system.
As a technology, the central bank has already made it clear that it does not trust Bitcoin, after a warning made to Argentine investors in recent months. And despite the government’s denials, there is concern about the entry of more Argentines into this sector.
The company Mercado Livre, for example, bought Bitcoin as a store of value after having problems with the exchange rate in the country where it is headquartered. In fact, Argentina’s exchange rate situation is complicated, with a huge devaluation against the dollar.
In addition, the country’s high inflation puts pressure on the population, which increasingly loses its purchasing power, with an increasingly weaker currency, the Argentine Peso.
President of the Central Bank of Argentina: “we will regulate the intersection of Bitcoin with the foreign exchange market”
Argentina’s national news agency, Télam digital, reported a speech by BCRA president Miguel Ángel Pesce last Tuesday (10). At an event organized by the Argentine Institute of Finance Executives (IAEF), he ended up talking about Bitcoin.
“The president of the Central Bank (BCRA), Miguel Pesce, guaranteed today [10/08/2021] that the institution is working to alert unsophisticated investors about the risks of investing in cryptocurrencies such as Bitcoin and that, in addition to the transactional use that can be given to these instruments, it wants to avoid being linked to the foreign exchange market.”
In his speech, he stated that Bitcoin is not a financial asset. In his opinion, as the BTC has no backing and cannot generate profitability, investors should be prevented from being exposed to this technology.
For Miguel, Bitcoin was created to remove the state’s power to issue the money, and should then be regulated soon.
“Bitcoin was created as a substitute transaction mechanism for money where the state did not play a role.”
As its market price rises, the BCRA president said investors are confused by the technology. Thus, there is the fear that Bitcoin will mix with the Argentine exchange market, with the central bank being responsible for creating rules for the sector.
Bitcoin situation in the country could get complicated
Argentina is one of the South American countries that have received any Bitcoin regulation proposal in recent months. One of them is the proposal to pay salaries in Bitcoin for salaried workers, which can be made by mutual agreement between employees and their bosses, if legalized.
Even so, there are two projects circulating in the country for the creation of stable cryptocurrencies, which could be used to counteract Bitcoin. One of them would be backed by Lithium, with the public intention of “ending” the main cryptocurrency.
Apart from competitors and the current pressure for regulation, the Central Bank of Argentina plans to launch by next November an instant payment system similar to the Brazilian PIX, but called Transfer 3.0.
In recent days, the Dietrich Group, an important company with Volkswagen and Ford dealerships in the country, announced that it will accept Bitcoin as a means of payment for booking 0 km cars.
With the new possibility, a customer has even made the payment for a Volkswagen Nivus Confort, intermediated payments in partnership with a local crypto startup.
Thus, the pressure from the government puts several weapons in Bitcoin’s crosshairs, in an attempt to contain the adoption in the country.