Share this article
Argentina's Central Bank Issues Warning to Burgeoning Bitcoin Ecosystem
The bank warns of the risks inherent in using digital currencies and states they are not legal tender.
Updated Sep 11, 2021, 10:49 a.m. Published May 29, 2014, 2:09 p.m.
Make us preferred on Google
Argentina's central bank (BCRA) has issued a statement warning the public of the risks inherent in using digital currencies.
The bank, headed by Juan Carlos Fabrega, reiterated that "virtual coins" are not issued by the central bank or any other international monetary authority and, therefore, are not legal tender.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Its statement goes on to highlight cryptocurrency's potential for use in criminal activity:
"Internationally, however there is still no consensus on the nature of these assets, various authorities have warned of [their] possible use in money laundering operations and various types of fraud."
Meanwhile, since there are no government-level mechanisms to ensure the "official value" of digital currencies, users are told that they have shown great volatility so far and have experienced substantial and rapid price changes.
Finally, the statement concludes that "the risks associated with transactions involving the purchase or use of virtual coins as payment, are supported exclusively by their users."
Volatility problems of its own
Currency restrictions have caused significant issues for Argentinians in recent years, as the government has struggled to boost confidence in the national currency, the peso, by restricting the dollar.
over the past year reached 100% by some estimates, and past crises have been even worse, with inflation reaching nearly 5,000% in 1989, resulting in massive food shortages and riots around the country.
This history of instability has a created a population desperate for a form of currency that better holds onto its value, leading to a thriving currency black market that generally favours the dollar, but has now also started adopting bitcoin.
This recent trend has seen a number of digital currency exchanges opening in the country and analysis has shown that Argentina's early adopters are prepared to pay a premium for their bitcoin.
CoinDesk recently spoke to Alan Safahi, CEO of cash-to-bitcoins service ZipZap, who said:
“We see a lot of pent-up demand for bitcoin in Argentina. I was there a couple of months ago – people in the streets come up to you and try to convert your dollars into bitcoin.”
He explained that in countries like Argentina, Venezuela and Nicaragua, with their closed economies and strict financial controls: “Those are the markets where bitcoin volatility actually looks really good!”
Argentine bank image via Diego Silvestre / Shutterstock.com
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
HYPE token's 30% surge is a story of crypto-traditional market convergence, treasury firm says
HYPE has surged 30%, outperforming bitcoin, ether and the CoinDesk 20 index by a big margin.
What to know:
- Hyperliquid's HYPE token has surged more than 30% to $33, far outpacing bitcoin, ether and the broader crypto market, as trading activity on the platform accelerates.
- The token rally represents the merging of traditional assets with the crypto world, according to Hyperion DeFi, which is a HYPE treasury company.
- Originally a crypto perpetuals exchange, Hyperliquid has expanded into tokenized trading of equity indices, individual stocks, commodities and major fiat pairs via its HIP-3 upgrade.
Top Stories
