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Latin American crypto revolution on hold as Argentina throws spanner in the works

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Latin American crypto revolution on hold as Argentina throws spanner in the works

Regulation

The Central Bank of Argentina’s board of directors issued a notice prohibiting banks from offering cryptocurrency services.

2 min read

Updated: May 6, 2022 at 3:02 pm

Cover art/illustration via CryptoSlate

The Central Bank of Argentina issued a release on May 5 detailing plans to “discourage the offer of crypto assets” through its financial system.

The release stated financial service providers are prohibited from offering digital asset services not registered or authorized by the central bank.

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“Financial entities may not carry out or facilitate their clients to carry out operations with digital assets, including crypto assets and those whose yields are determined based on the variations that they register, that are not regulated by national authority and authorized by the Bank.

Recently, Latin America has been the focal point for pro-crypto moves at the governmental level. For example, Brazil tabled draft proposals last month to implement a comprehensive regulatory framework to govern crypto assets.

News of Argentina restricting banks from dealing in crypto is a significant setback for the industry. More so for Argentinians who have turned to cryptocurrencies to deal with sky-high inflation in the country.

Argentina sours on crypto

The country had a somewhat amiable attitude toward digital assets, with no specific regulatory restrictions, previous to the central bank’s notice.

Indeed, cryptocurrency usage has flourished as it offers locals a viable alternative to the volatile peso and the strict capital controls imposed by the government.

Earlier this week, two of Argentina’s largest retail banks, Banco Galicia and BruBank, listed digital assets on their websites. BruBank had enlisted the help of infrastructure provider, Lirium, who offers ‘plug and play’ digital asset solutions.

The CEO of Lirium, Martin Kopacz, said account holders could buy and sell a limited range of cryptocurrencies. But, as a walled garden, users cannot send tokens off the platform.

Nonetheless, this still represents a leap forward for cryptocurrencies in that Argentinians can gain digital asset exposure via established legacy institutions.

However, the win was short-lived, as the CBoA issued its notice restricting banks from offering crypto just two days later.

Central bank seeks to limit capital flight

The central bank’s board of directors imposed the new measures to mitigate risks associated with crypto.

The risks are high volatility, disruptions including cyberattacks, money laundering, terrorist financing, and the absence of safeguards and adequate information. The notice also mentioned the threat of capital flight from the country.

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“The different actors involved in the operations with these assets may not be established in the country, which could generate departures from the general regulations.”

In 2021, the regulator imposed strict capital controls that limited foreign exchange to just $200 a month, and exchangers were required to pay two different taxes.

CBC

Cyprus Drafts Crypto Rules, May Introduce Them Before EU Regulations

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Cyprus Drafts Crypto Rules, May Introduce Them Before EU Regulations

Cyprus has prepared its own legislation to regulate crypto assets and is likely to adopt it before Europe finalizes a common regulatory framework, a government official has indicated. The authorities in Nicosia welcome the “careful” use of cryptocurrencies, he added.

Government of Cyprus to Submit ‘Attractive’ Crypto Bill

Cyprus has an “enviable position” in the EU when it comes to innovation, with the second-best progress last year, according to the European Innovation Scoreboard, the country’s Deputy Minister for Research, Innovation and Digital Policy Kyriacos Kokkinos stated at a meeting with the local fintech community. The event was devoted to digital assets, entrepreneurship and financial technology.

Commenting on the future of digital assets in Cyprus, including cryptocurrencies, the minister walked a fine line between embracing innovation and having to pay heed to laws, the Cyprus Mail wrote in a report on Thursday. Quoted by the English-language daily newspaper, Kokkinos elaborated:

I can tell you that Cyprus welcomes the use of digital and crypto assets, but we still need to be very careful and respect not only the regulations currently in place but also the absence of any regulations.

The government representative gave an example with Malta, the regulatory framework of witch attracted many crypto companies and investors but also led to increased scrutiny and investigations into some of its companies and banking institutions. “We have to be careful of the frameworks of the European Union since we are a member state,” Kokkinos emphasized.

The deputy minister then revealed that the Cyprus government has already drafted a “very attractive bill on crypto assets.” The legislation has been published and interested parties can review it, he pointed out. The executive power has also commissioned a New York-based firm to assist the island nation with the implementation of the regulations.

“Our challenge is not being aligned with the EU, it’s about the dilemma of whether to wait for the ECB to finalize their own regulatory framework or do we go alone on our own, with the former scenario also involving the possibility of that framework being overregulated,” Kyriacos Kokkinos remarked. “My answer is that we will go at it alone while respecting the rules,” he added.

The deputy minister acknowledged that certain challenges exist, including some disagreements between the government and the Central Bank of Cyprus (CBC). “We must remember that the CBC is subject to the ECB and central banks tend to be conservative, so our job is to challenge them through the debates we are having with them,” he told the audience at the event which took place in Larnaca.

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CBC, Central Bank, Crypto, crypto assets, Cryptocurrencies, Cryptocurrency, Cyprus, deputy minister, ECB, EU, European Union, Fintech, Government, innovations, legal framework, Regulation, Regulations, rules

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Do you expect Cyprus to introduce crypto regulations before the European Union? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Panama President Mulls Crypto Bill Approval Due To Money Laundering Concerns

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Panama President Mulls Crypto Bill Approval Due To Money Laundering Concerns

The president of Panama, Laurentino Cortizo, has declared he will not sign the recently approved cryptocurrency bill passed by the National Assembly of the country in its current form. Cortizo stated that one of his main concerns about the bill is the stance it takes regarding money laundering activities and crypto. Cortizo may approve some parts of the bill while vetoing others.

Panama’s President Considers Crypto Bill Veto

Laurentino Cortizo, the president of Panama, has announced his opinion regarding the recently approved cryptocurrency bill, and how it might be too lax when it comes to dealing with unlawful activities like money laundering in the sector. While speaking at the Bloomberg New Economy Gateway Latin America conference in Panama City, Cortizo stated:

If I’m going to answer you right now with the information that I have, which is not enough, I will not sign that law.

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Furthermore, Cortizo explained that he and his government would have to be “very careful” if the crypto bill presented has clauses dealing with money laundering activities, remarking that these are very important to Panama.

Panama allows the president to have veto power over the bills presented by the National Assembly, and Cortizo could use this attribution to repel the bill in its current form. However, Cortizo declared he and his lawyers are still reviewing the law to make a decision.

Panama’s Crypto Law

Panama started its cryptocurrency regulation journey last year, when Gabriel Silva, a national representative, introduced a crypto bill with a proposal that aimed to modernize the country and bring it up to par with other countries in the area. The bill, which faced some changes during its discussion, establishes pivotal concepts about crypto, blockchain, and virtual asset service providers.

In addition to this, the approved version of the bill introduces blockchain as a tool to improve the transparency of state spending, like other projects introduced already in Latam. This would include the progressive migration of public records to the blockchain.

Another important proposal of the bill is the digitalization of the identification process, with issued IDs being published on a public blockchain. Cortizo might take some of the articles passed and make them law, and veto other parts of the bill. To conclude, Cortizo stated:

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It is an innovative law from what I have heard, it’s a good law. However, we do have a solid financial system here in Panama and one of the things I’m waiting on is when you have a global regulation of crypto-assets.

What do you think about the opinion of the president of Panama regarding the passed crypto bill? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Trade Minister Expects Russia To Legalize Cryptocurrency

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Trade Minister Expects Russia To Legalize Cryptocurrency

Cryptocurrencies will be eventually legalized, a member of the Russian government has opined. The question is when this will happen, Trade Minister Denis Manturov stated as new crypto-related legislation advanced in the State Duma this week.

Crypto Legalization Is Current Trend, Russian Minister Acknowledges

Cryptocurrency can be legalized in the Russian Federation, according to a statement by the country’s Minister of Industry and Trade Denis Manturov, during the “New Horizons” educational marathon organized by the Russian “Knowledge” society. Quoted by the Tass news agency, the government official elaborated:

I think so… The question is when this will happen, how it will happen and be regulated. The central bank and the government are actively engaged in this. Everyone is inclined to understand that this is a trend of the times, and sooner or later, in one format or another, it will be done.

Manturov emphasized this should happen in accordance with the laws and rules that are yet to be adopted and formulated. Russian authorities have been mulling over the future status of cryptocurrencies and related activities such as trading and mining this year, with two opposing views clashing during the deliberations.

While the Central Bank of Russia proposed a blanket ban on crypto operations, citing threats to the country’s financial system, the Ministry of Finance believes they should be regulated rather than prohibited and has submitted a new draft law “On Digital Currency” which is expected to be adopted this year.

The ministry has been also working on the issue of taxation of income and profits from transactions with digital financial assets. This week, the lower house of Russian parliament, the State Duma, approved on first reading draft legislation tailored to regulate the matter.

Most institutions in Moscow have sided with the Minfin’s approach, including the federal government which backed the department’s regulatory concept in February. At the same time, the majority also agree with Bank of Russia’s stance that cryptocurrency should not be recognized as a means of payment.

Another recent report revealed that the authors of the new legislation have incorporated provisions proposed by the Ministry of Internal Affairs, introducing procedures for the seizure of digital currencies with a court order as part of criminal proceedings and the establishment of a special wallet for storing seized crypto assets.

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bill, Crypto, crypto assets, Cryptocurrencies, Cryptocurrency, Digital Currencies, Digital Currency, draft law, Law, legalization, minister, parliament, provisions, Regulation, Regulations, rules, Russia, russian, State Duma, Taxation

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Do you expect the Russian Federation to eventually legalize cryptocurrency? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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