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Argentina's crypto market is expanding rapidly, which is being driven even more by local governments through domestic initiatives, regulatory developments, major investments, and the presence of key industry players. The article provides an overview of the crypto market in Argentina's landscape by examining government actions, regulatory compliance, major investments, and leading companies in the sector.
Argentina's Foreign Affairs Minister, Diana Mondino, said in December 2023 that her country would soon work to formally recognize Bitcoin as a legal means of payment in contract agreements. This decision was reached in response to the devaluation of the Argentine peso, the ARS, and is rather intended to give people alternatives amid economic instability.
On 10 November 2023, during the LABITCONF 2023 event held in Buenos Aires, the President of Bitcoin Argentina presented a preliminary legislative proposal for the equitable regulation of cryptocurrencies. It is expected that the envisioned legal framework would be decentralized in such a way as to instill maximum confidence among the public. The individuals declaring their assets on acceptance by March 2024 will be charged a 5% tax rate, which increases to 10% for declarations made in the April to June 2024 period and further to 15% for those filed during the July to September 2024 period.
QuarkID, powered by zkSync's ZK Proofs—a blockchain-based digital identity solution—will be launched in Buenos Aires in September 2023. As it is a decentralized protocol thanks to the technological contribution made by Extrimian, this technology contributes to users remaining in control of data and managing of certificates with public services.
Argentina has become one of the biggest players in the regional cryptocurrency market. The National Constitution of Argentina is very clear that the Central Bank holds the exclusive authority to issue legal currency. Cryptocurrencies do not stand for legal currency, since they are not issued by any government monetary authority and are not recognized as legal tender, according to Section 765 of the Argentine Civil and Commercial Code. Therefore, even though cryptocurrencies might conceivably be considered a form of money, they do not constitute legal currency because there is no statutory requirement to accept them in the settlement of debt or other obligations.
In January 2024, the government submitted a bill to Congress through which it proposed the Law of Foundations and Initial Measures for Argentine Liberty, aimed at eradicating state regulation of the financial sector and reducing extremely high levels of taxation. Notably, the deliberate avoidance of cryptocurrencies in the legislation gives a hint that people who possess such a class of assets shall not be taxed. However, capital gains from selling crypto above a certain threshold level will be taxed and international cryptocurrency transfers will face 5% to 15% taxes. This move would encourage foreign investment in cryptocurrencies.
The top and very active regulatory bodies in search of cryptocurrency solutions in Argentina include Financial Information Unit, Argentinian National Securities Commission, Central Bank of Argentina, Argentina Securities and Exchange Commission, CNV, and Argentina's Federal Administration of Public Income.
Two major associations govern and ensure adherence to laws, regulations, and standards in the cryptocurrency marketplace in Argentina: Bitcoin Argentina and CFA Society Argentina.
Some of the major investments related to the cryptocurrency market in Argentina are mergers and acquisitions, partnerships, funding, product launches, and service launches.
CoinDesk was acquired in November 2023 by the Bullish Group, a parent company to Bullish, a regulated digital asset exchange. The Bullish Group provides such a strategic acquisition that would strengthen its foothold in the cryptocurrency industry, being majority-owned by Block.one. This deal brings the CoinDesk acquisition into the suite of digital-asset services of the Bullish Group, further cementing its position in the marketplace.
In May 2022, Argentina's largest private bank, Banco Galicia, launched cryptocurrency trading on its platform. This allows users to purchase and sell top digital currencies such as Bitcoin, Ether, USDC, and XRP with ease directly in the bank's mobile app. The collaboration with Liechtenstein-based crypto provider Lirium underscores a rising trend among legacy players in the financial world toward embracing digital assets in servicing increasingly demanding clients.
Ripio, Defiant Wallet, Pactta, Buenbit, Yubiai, Xcapit, Agrotoken, Belo, ArQuants, Cexar, Maquina Capital, and SatoshiTango Corporación Cápsula are some key players in the cryptocurrency marketplace of Argentina.
The cryptocurrency market in Argentina is expected to reach US$89 million in 2028 from US$57 million in 2023, at a CAGR of 10.27 %. While challenges remain especially on the establishment of a comprehensive regulatory framework the proactive approach now being taken places Argentina at the forefront of this global cryptocurrency scene.
