Argentina’s central bank has blocked the offer of two of Argentina’s biggest banks just a few days after they were permitted to begin crypto trading.
The central bank of Argentina (BCRA) has declared a ban on financial firms solely offering crypto trading just days after two of the country’s largest banks announced their intentions to do so.
On the 5 May, the BCRA claimed that its aim is to reduce crypto’s danger to customers and the entire financial system. The bank said it is not opposed to cryptocurrency but wants a regulatory structure in place before allowing them on its platform and to curb money laundering.
The two banks in question are Banco Galacia and Brubank- both had received authorization from BCRA earlier this week before they were forced to stop offering cryptocurrency trading services on their platforms.
It appears that the banks were offering crypto trading without fully understanding the risks involved. The BCRA has said that it will work with the banks to help them develop a better understanding of the risks before they are allowed to offer crypto trading again.
A survey conducted by Banco Galacia determined that 60% of respondents favored easier access to cryptocurrency. The bank’s offer of a crypto exchange service may have been in response to this.
This latest move by the central bank appears to be more about control than increased security for customers, as many banks still allow crypto trading outside their platforms. It also looks like it could hinder innovation as the country leaders are already working on cryptocurrency regulations.
21% use cryptocurrency in Argentina
According to Statista’s data, 21% of Argentineans possessed or had used cryptocurrency in 2021, making it the sixth most popular worldwide and the first in the Americas.
In May last year, the Argentina Central Bank warned consumers against the dangers of cryptocurrency and outlined its worries about money laundering and price volatility. It’s presently unclear if this new prohibition will be temporary or long-lasting.
Argentina’s banks provide a venue for purchasing cryptocurrencies through their websites
Initially, Argentinian banks allowed website customers to buy Bitcoin, Ether, USD Coin, and Ripple with the goal of increasing cryptocurrency trading in the future. But now that the central bank has intervened, it looks like that’s not going to happen anytime soon.
The central bank’s decision may have something to do with the current economic situation in Argentina. The country is in the midst of an inflation crisis, and the government has been forced to take drastic measures to stabilize the economy.