Argentina Officially Legalizes Bitcoin And Other Crypto For Payment

Argentina legalizes Bitcoin. (Photo; Doc. Ledger Insights)

JAKARTA - Argentina, a Latin American country experiencing a high economic and inflation crisis, has taken bold steps by legalizing the use of Bitcoin and other cryptocurrencies for contract and payment settlements.

The announcement was made by Argentina's Minister of Foreign Affairs, International Trade and Economy, Diana Mondino, via social media on December 21, 2023. Mondino stated that the Argentine government confirmed and confirmed that in the country, contracts could be agreed upon in Bitcoin.

He also added that cryptocurrencies and other types such as beef doses per kilogram or milk per liter can also be used as a means of payment, in accordance with Article 766 of the new economic decree issued by President Javier Milei.

The DECree is part of a broader economic and deregulation reform initiative carried out by the new Argentine government, led by Milei, a liberal economist known as a Bitcoin supporter.

By integrating crypto into its financial system, Argentina not only offers its residents more financial options, but also has the potential to be a pioneer in the adoption of digital assets in Latin America, which are currently lagging behind compared to other continents.

This move is also considered a strategic response to the long-standing economic challenges that hit Argentina, which is experiencing hyperinflation, a decline in the value of pesos, and large foreign debt. By legalizing crypto, Argentina hopes to increase competitiveness, attract investment, and create new jobs in the fintech sector.

IMF Reprimanded

On the other hand, this effort also poses regulatory and operational challenges that the government needs to overcome, including transaction security issues, market stability, and cooperation with international financial institutions.

One of the biggest challenges facing Argentina is the rejection of the International Monetary Fund (IMF), which has loaned the country $57 billion to the country in 2018. The IMF has urged Argentina to crack down on the use of cryptocurrencies among local residents and depreciate celebrities to reduce the budget deficit.

Despite being urged not to use crypto by the IMF, it appears that Milei remains a Bitcoin supporter, and his government will give citizens and businesses full freedom to choose their own payment methods. Milei has even stated that she wants to make Argentina her Latin American Switzerland by removing taxes, removing central banks, and adopting gold standards.

It is not yet clear whether the Argentine government intends to develop a regulatory framework for crypto or issuing new rules for the industry. Currently, Argentina is still following the regulations issued by the Financial Action Task Force (FATF), an intergovernmental agency that sets standards to prevent money laundering and terrorism financing.

The international community is closely monitoring crypto adoption by Argentina. This move could affect other countries, especially those struggling with economic instability, to consider crypto as a viable means of transaction.

The long-term impact of this decision on Argentina's economy and the global financial landscape remains to be seen. However, this is a significant step in the history of crypto development in the world.