IMF’s Deal Does Not Seek to Discourage the Use of Bitcoin, Says Argentina
2022.04.29 10:26
IMF’s Deal Does Not Seek to Discourage the Use of Bitcoin, Says Argentina
- The Central Bank of Argentina responded to the request for information presented by NGO Bitcoin Argentina.
- In its response, the issuing body said that the cryptocurrency sector must be constantly monitored.
- However, it does not propose any specific action to block or discourage the adoption of cryptocurrencies in the country.
The Central Bank of the Argentine Republic (BCRA) clarified that the mention made of cryptocurrencies in the Memorandum of Economic and Financial Policies signed by the government with the International Monetary Fund (IMF) recently, is not the axis of the program that will be implemented.
The clarification of the issuing body arises after the request for information presented by the NGO Bitcoin Argentina to the Ministry of Economy so that the government would give access to the public document that contains the details of the debt refinancing agreement for more than $45,000 million signed with the IMF.
The NGO filed a formal complaint for administrative silence from the Ministry of Economy, which then forwarded the request for a response to the Central Bank. The body responded two months later by denying that the goal of the agreement is to discourage the use of Bitcoin and other crypto assets as part of the “Strengthening financial resilience” policies.
In the technical document that is part of the agreement signed with the IMF, there is a section that raises the need to “discourage the use of cryptocurrencies with a view to preventing money laundering, informality, and disintermediation.”
After the content of the document was revealed during its discussion in parliament, the Argentine crypto community made public its disappointment and rejection of the IMF request, while requesting a formal clarification from the government of Alberto Fernández.
The Argentine Central Bank has said that Bitcoin and other cryptocurrencies represent a potential risk for users and for the financial system given their volatility, for which it recommends that they be “constantly monitored.”
The Arguments of the BCRA
In its response to the NGO Bitcoin Argentina, the BCRA also emphasizes the risk of cryptocurrencies due to “the cross-border nature of these assets, the fact that they are not considered legal tender, the high levels of volatility in their prices and the variable levels of backing in fiat currency.”
The bank’s arguments are based on reports submitted by international financial sector organizations such as the IMF, the Bank for International Settlements (BIS), the Financial Stability Board (FSB), and the Financial Action Task Force (FATF).
The NGO tweeted a message in which it is satisfied with the response given by the Central Bank, where it states that there is still a lot of work ahead in the Argentine cryptographic ecosystem so that “more and more people and institutions can understand the potential of Bitcoin blockchain and the crypto industry.”
On The Flipside
- Anti-Bitcoin measures in Argentina were requested by the IMF as part of the debt refinancing agreement of the South American country.
- The BCRA states that cryptocurrencies do not have state support or protection and are “exposed to operational disruptions and cyber attacks.”
- In recent months the IMF has raised its stance against cryptocurrencies to the point where it presents them as dangerous assets and points out that CBDCs are better.
Why You Should Care
- Meanwhile, the Fund promotes the issuance of central bank digital currencies (CBDC) among the member countries of the organization.
- Until now, the BCRA and the Argentine government have maintained a cautious position regarding cryptocurrencies in wide use in the country.
“The BCRA has adopted an approach based on prudence, obtained from the constant follow-up and monitoring of international experiences, discussions and publications in forums and organizations at a global level and other public information sources specialized in the matter,” says the document.
It is not yet known what type of measures they will adopt in the future “to reduce uncertainty and anchor exchange rate expectations -for which the agreement with the IMF will contribute-, in addition to reconfiguring their monetary policy instruments to accompany the recovery process and reinforce monetary exchange and financial stability.
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