In order to curb the fast depleting foreign reserve in Argentina, the Central Bank of the Argentine Republic has placed a stringent restriction on the amount of Bitcoin(BTC)trade and US dollar its citizens can purchase, and limited the means with which people could make such purchases.
Argentina’s economy may have hit rock bottom already. The Argentinian government made several almost desperate moves recently, turning to its last resorts as the country’s foreign reserve continues to dwindle by the day.
So far, the government of Argentina has experienced over 20 billion dollars drop in its economy, forcing it to embark on a more drastic measure to control how currencies – both local and foreign – flow into the country. The nation’s central bank released the following statement:
“Given the current degree of uncertainty, the board of the BCRA (central bank) has decided to take a series of measures [on October 30] that seek to preserve the reserves of the Central Bank.”
According to the Central Bank of the Argentine Republic, this move is not only exclusive to putting an end to excessive outflows of the nation’s fast depleting foreign exchange reserves but it is also critical to help stabilize the markets and preserve the nation’s economy.
The government, therefore, decided to restrict cryptocurrency trading in the country by prohibiting to acquire digital assets with credit cards. Argentina’s central bank thus declared:
“Acquisition of Bitcoin and cryptocurrencies: It is prohibited to purchase BTC with credit cards. It remains only as an alternative for this investment to do so with funds transferred from a bank account.”
Although the measure seems a bit (for some, exceedingly) extreme, it is, however, critical following the massive outflow of foreign currency after former President Mauricio Macri was removed from office on October 30. The alarming increase in money pouring out of the country called for a tougher measure, compelling the central bank to limit US dollar purchases to 200 USD per month through local bank accounts and 100 USD per month in cash.
This is a far cry from what it was earlier in September. Notwithstanding, it is expected to continue until the end of the year. With these restrictions in place, the crypto market may experience a slight fall as less amount will flow from the nation to the industry.
Even worse, many from the crypto community are hiding in fear so they would not to attract attention from the government. Who knows who will receive the next hit?
Juan Llanos, an anti-money laundering specialist and adviser to the crypto platform Metal Pay weighed in on the issue via Twitter, explaining that crypto exchanges in the country are scared of advertising their services so the government will not roll out stricter regulations on their operations.
“Oh, oh. It’s moving faster than I expected: Argentina’s Central Bank just restricted payments with locally issued credit, debit and prepaid cards for all transactions involving, among others, the purchase of [Bitcoin and other] crypto assets. What’s next?”
It’s really still unclear what’s next, especially for the cryptocurrency industry.
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