Late last year, when liberal politician Javier Millay was elected President of Argentina, many in the traditional finance and digital asset worlds were surprised that the seemingly pro-Bitcoin leader was the leader of South America's second-largest economy. We speculated that this would spur an increase in the use of virtual currencies.
However, after the recent announcement of new regulations that will require both companies and individuals who handle or trade digital assets to register with the government, many are wondering if Argentina is moving away from digital assets. I'm wondering. A new era defined by deregulation and increased use of cryptocurrencies.
Critics of the new regulation see it as adding an unnecessary layer of compliance and complicating rather than facilitating the adoption of cryptocurrencies.
“I see it in the opposite direction when it comes to Mr. Millay's rhetoric,” said Hernan Yerati, an Argentine and partner at Borderless Capital. The company recently announced plans to open its Latin American headquarters in Argentina, a country that it says is leading the way in terms of digital asset innovation.
I hope that Millay will usher in a new era.
Mr. Millay's rise and Argentina's financial crisis seemed to set the stage for reform and expanded use of cryptocurrencies, particularly Bitcoin. “His presidential inauguration greater acceptance “The integration of cryptocurrencies into the Argentine economy offers a potential solution to the long-standing problems of inflation and financial instability,” Grayscale Research said the day after Milay's election victory.
In December, two weeks after Millay took office, the Argentine government announced that Bitcoin could be used as the currency for official contracts, in a sign that it was committed to embracing digital assets. Many Argentines are turning to cryptocurrencies as an alternative as their country's peso loses value.
Yerati said the registration rules appear to be a holdover from the previous administration, but reversing them could take time. “Even if the government continues its rhetoric of deregulation and market freedom, there could be significant delays and sand in the wheels in rolling back this particular regulation,” he told The Block. Told. “Given the negative impact, we hope to see further clarity from the government in the coming days.”
Bizo Argentina country manager Julián Colombo downplayed the potential impact of the new regulation and the idea that Millay is a true champion of digital assets. “I don't see any political overtones as some media outlets have reported.” [the new regulation]” Colombo told The Block. “President Milley is not personally involved in this process, and contrary to his statements during his campaign, he is not a president for whom cryptocurrencies are a priority at this time.”
Bitso is a leading cryptocurrency company in Latin America. The company was founded in Mexico in 2014 and said it had 8 million users as of the end of last year.
Changes in “rhetoric”
When Millay was elected last November, Ruslan Lienka, head of markets at Euhodor, predicted that the use of cryptocurrencies in Argentina could eventually become “even more widespread” under the new president. He said he is doing so. Now, Lienka said, Millay may change his attitude.
“There's nothing wrong with the registration rules themselves,” he told The Block, “but it could be a step towards old policy.” “You can also notice a change in Mr. Meray's rhetoric after the decision to abolish the central bank and postpone dollarization.”
While many expected Millay to pave the way for greater use of cryptocurrencies, the new president is also expected to follow through on his pledges to reform the central bank and dollarize the economy, which Argentina This is a measure that has the potential to improve the large-scale problems of hyperinflation and currency depreciation that Japan faces. But last week, Milley told Bloomberg that his own reform plan would take longer than expected.
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