Argentina’s dreams of greater crypto adoption imperiled by new regulation, Milei’s shifting rhetoric
Quick Take
- New regulation in Argentina forcing companies and individuals that work with, and trade, digital assets to register with government seen as a step in the wrong direction by some crypto advocates.
- When President Milei was elected many expected it might usher in an era of greater use of crypto in Argentina.
Hope Milei would pave the way for new era
When libertarian politician Javier Milei was elected president of Argentina towards the end of last year, many in the worlds of traditional finance and digital assets speculated that the seemingly pro-Bitcoin leader might help spur increased use of cryptocurrencies in South America’s second-largest economy.
But after new regulation was recently unveiled — which requires both companies and individuals working with, or trading, digital assets to register with the government — many are wondering if Argentina is now steering away from a new era defined by less regulation and greater use of cryptocurrencies.
Critics of the new regulation see it as adding an unnecessary layer of compliance that will complicate crypto adoption rather than encourage it.
“It seems in the opposite direction with respect to Milei’s rhetoric,” said Hernan Yellati, who is both Argentinian and a partner at Borderless Capital. The firm recently announced plans to open a Latin American headquarters in Argentina, a country it said is leading the way in terms of digital asset innovation.
Change in ‘rhetoric’
When Milei was elected last November, Ruslan Lienkha, chief of markets at YouHodler, said he expected that the use of crypto could eventually be “much broader” in Argentina under the new president. Now, Lienkha said it appears Milei may be changing his tune.
“There is nothing bad in the registration rule itself. However, it would be a possible step towards” older policy, he told The Block. “We also can notice the change in Melei’s rhetoric, after he decided to postpone central bank removal and dollarization.”
While many hoped Milei would pave the way for increased use of crypto, the new president was also expected to deliver on promises of central bank reform and the dollarization of the economy, a measure that could ameliorate Argentina’s massive problems with hyperinflation and currency depreciation. But then last week, Milei told Bloomberg his plans for reform are going to take longer than he hoped.
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