Argentina - bad for Bitcoin

Argentina - bad for Bitcoin

By Steven_BA | Crypto-Newbie | 22 Nov 2020


I read somewhere recently that the Argentine currency, Peso (ARS) is not doing very well compared to the dollar. In fact, the entire economy of Argentina is declining given the wrong economic and financial measures adopted by the state authorities in recent years, as well as the COVID-19 pandemic. All these have led to an increase in the inflation rate and a significant depreciation of the national currency. On the 26th of May 2020, you could buy 1 USD with 68.213 ARS, while today you can do this with 80.343 ARS, which is a very significant increase. In the last 60 days, the average was 73.905 ARS for 1 USD

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But what about crypto-currencies, especially Bitcoin (BTC) in Argentina?

Argentina's Financial Intelligence Unit (Argentina Unidad de Informacion Financiera) is the country's main national agency that declared war to those that commit financial crimes. Among many other things, recently this financial authority have decided to monitor and control all crypto-transactions, especially those that involve BTC. Its aim is to tighten control over this type of transactions in order to reduce the depreciation of the national currency, as long as thousands of BTC transactions evade the country's financial laws. 

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By doing this, the government's aim is to make harder BTC transactions inside the country, and not just Bitcoin. It is well know that crypto-trading is used for money laundering and other illicit activities, and this is exactly what the national government wants to prevent. Looking at these measures in simply terms, the peso may survive, because many financial analysts and observers believe that these new measures are aimed for preventing the further devaluation of the national currency. 

How is this done? Basically, the Financial Intelligence Unit will introduce harsher measures in order to gain more and more control over all the crypto-transactions.  

The FIU President, Carlos Alberto Cruz, said in a statement that 

Recently, we have seen an increase in operations carried out through virtual assets. These transactions "could be carried out by people who intend to circumvent international standards and avoid the [anti-money laundering] framework".

As I was already saying above, FIU will adopt and implement measures in order to have a better control in all financial sectors. By this, I also mean that they will intensify financial controls. 

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What are they looking for is information regarding crypto-transactions: who made them and what companies or entities are involved in such crypto-transactions. They went even further and asked banks, credit card companies and stock exchanges to report directly to them any suspicious activity. But not only banks, credit card companies and stock exchanges can deal with such transactions. There are many other who are involved and commit financial crimes or are used by individuals and entities to commit such crimes. What I mean by these is postal and shipping companies, brokers, NGOs, most of them are dubious, art galleries, where people buy or sell items in exchange of crypto-currencies in order not to pay taxes, and even different sport events. All of these will be subjected to a stricter control.

Why now?

In my opinion, looking at what is happening in Argentina, economically and financially speaking, the government is really trying to adopt new measures in order to survive financially. That is why this Unit has been tasked now by the government to fight against those that elude the laws in order to gain more profits. According to the statistics, many Argentinian people, and not just those from Argentina, are trying to focus their attention on other more stable financial means and they distance themselves from the peso, which is very bad for the national currency. It will go down very badly soon. These measures will not be too efficient anyway and the situation will be even darker if the national authorities will violated citizen's privacy and rights.  

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Steven_BA
Steven_BA

BA and MSc in International Relations. New to cryptocurrency. One of the best political analysis. Expert in terrorism, post-conflict states and state-building. Up-to-date to everyday political and foreign news.


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