n December 2023, Libertarian economist Javier Milei was elected president of Argentina, bringing an anarcho-capitalist philosophy to rebuilding the national economy. His plans included dollarization and reforms seen as potentially beneficial for Bitcoin and cryptocurrency adoption in the crisis-hit country.
However, a few months into Milei's term, the Comisión Nacional de Valores or National Securities Commission (CNV) announced in late March 2024 that a mandatory Registry of Virtual Asset Service Providers would be implemented. This would require all companies and individuals involved in activities like crypto buying, selling, lending and trading to complete the registration. Compliance would be needed not just from locally-based operations but also from those serving the Argentinian market from elsewhere.
Reactions From Experts
The announcement triggered mixed reactions from some experts. Manuel Ferrari, a member of the Argentinian pro-cryptocurrency advocacy group Directive, criticized it as "complete nonsense" that constitutes overreach. In his view, Bitcoin is money, not a security, so exchanges buying and selling it shouldn't need CNV oversight akin to financial institutions dealing with traditional currencies.
Similarly, Nicolas Bourbon, co-founder of cryptocurrency payment solution KamiPay, felt the measure didn't align with Milei's typically libertarian stance towards currencies. However, Bourbon noted the president respects freedom of options and likely isn't aiming to interfere with Bitcoin use directly. Rather, the goal may be satisfying international anti-money laundering regulations.
Potential Impacts
In the short term, it seems everyday crypto users in Argentina won't face major disruption from the new rules. As Bourbon mentioned, Milei is still giving leeway for currency choice and the registry mainly targets businesses rather than individuals for now.
However, some platform operators may face additional compliance burdens depending on how stringent registration requirements become. This could potentially drive some smaller services away from the market over time if costs rise significantly. On the other hand, adhering to regulations may give larger, compliant companies an advantage versus non-registered competitors still allowed to function for now.
The long-term effects will also depend on how aggressively the CNV chooses to enforce the rules. A heavy-handed approach could stifle growth and decentralization in the cryptocurrency space as seen as desirable by Milei and others. But a relatively lighter touch may end up changing little aside from satisfying legal demands on paper.
