Argentina has emerged as a prominent player in the world of blockchain and cryptocurrency, capturing the attention of enthusiasts, investors and businesses alike. According to a 2023 report by Chainalysis, the cryptocurrency market in Argentina stands out as an example of crypto’s unique utility, showing remarkable resilience and growth.
As Argentina navigates through economic challenges and struggles with currency devaluation in 2022 and 2023, all eyes are on the policies of its newly elected pro-Bitcoin (BTC) president, Javier Milei, who took office on Dec. 10, 2023. With a 200% inflation rate, rising poverty and a polarized population as challenges for his presidency, defining crypto regulations and policies will be a major part of Argentina’s upcoming digital adoption path.
This article outlines the framework governing digital assets and cryptocurrency regulations in Argentina. It will also answer whether crypto is allowed in Argentina and look into the overall crypto legislation in Argentina to understand the growing potential and the need for parallel regulatory requirements.
Is crypto legal in Argentina?
While it is not “illegal” to buy and hold Bitcoin and crypto in Argentina, cryptocurrencies are not recognized as legal tender in Argentina. However, the turn of events in 2023 is creating a strong voice for this to become a reality, owing to the elevation of Milei as the country’s new president. As part of his election campaign, he made controversial remarks on Argentina’s Central Bank, calling it a “scam,” and questioned the country’s existing financial system as a tool the establishment uses to harass the public with inflationary tax.
On the contrary, he stated Bitcoin is the solution to return monetary power to the people, generating significant interest in the crypto circles and Argentine citizens — one-third of whom use crypto for everyday transactions and to hedge against currency depreciation and inflation, as per a 2024 report from the Crypto Council for Innovation.
Dec. 21, 2023, 10 days after Milei assumed power, Argentina officially endorsed using Bitcoin in legally binding contracts. Argentina’s foreign minister, Diana Mondino, in a Dec. 21, 2023 post on X (formerly Twitter), said, “We ratify and confirm that in Argentina, contracts can be agreed in Bitcoin,” marking a significant stride toward broader cryptocurrency acceptance within the country.
Cryptocurrency adoption and growth in Argentina
Argentina’s economic challenges have waxed and waned since the 1980s, with double-digit inflation rates for the Argentine peso. The annual inflation rate for the peso went from 10.46% in 2010 to 42.02% in 2020. The country’s inflation rate rose to 94.8% in 2022 and 254% year-on-year in January 2024.
Attenuated by this, the common citizen found refuge in alternate currencies. This fueled the widespread adoption of cryptocurrencies, with approximately 5 million Argentines using digital assets for everyday transactions in 2023 and safeguarding against currency depreciation and inflation.
America’s Market Intelligence study in 2022 found that 27% of Argentine respondents bought crypto regularly (15% from 2021). The study also highlighted that 98% of Argentines know about cryptocurrency, and one in five residents plans to buy crypto in the future.
While leading in Latin America in crypto transaction volume, totaling around $85.4 billion, Argentina, in the second half of 2023, recorded the country’s largest purchases and stablecoins holdings.
Ways to buy crypto in Argentina
There are multiple cryptocurrency exchanges, peer-to-peer (P2P) platforms, and digital wallet service providers that allow buying Bitcoin and other cryptocurrencies in Argentina. Here are some popular places one may explore when looking to buy crypto in Argentina:
Crypto exchanges in Argentina
Cryptocurrency exchanges operating in Argentina include Binance, OKX, MEXC, Kraken, Gate.io and other leading exchanges and require Know Your Customer (KYC). As part of the KYC process, one will need to verify their identity and address. Documents, including a passport, national identity card or driver’s license, are some requirements for ID verification purposes.
Digital wallet service providers
Lemon Cash, a crypto exchange, offers users crypto-linked debit cards for everyday purchases, converting the crypto amount to fiat at the point of sale. Approximately 2 million Argentines use Lemon Cash, which supports mobile apps via Google Play and the Apple Store.
Peer-to-peer (P2P) exchanges in Argentina
Additionally, P2P exchanges are prevalent, playing a crucial role in facilitating millions of dollars in remittances each year. Bitfinex, a cryptocurrency exchange with a known P2P market, announced in 2023 its entry into the P2P market in Argentina, joining the likes of Paxful, Airtm and others.
Bitcoin ATMs in Argentina
Another way to buy Bitcoin in Argentina is through Bitcoin automated teller machines (ATMs). These ATMs allow users to instantly purchase and sell cryptocurrency using cash. There are approximately nine Bitcoin ATMs, eight of which are located in the Argentine capital city of Buenos Aries.
How to purchase crypto in Argentina
Here’s a step-by-step guide to help navigate the process of buying, selling and trading various cryptocurrencies in Argentina:
Step 1. Register with a cryptocurrency exchange
Choose a crypto exchange to register with, such as Kraken, Binance or any other. These exchanges cater to beginners, offering multiple deposit methods and supporting various cryptocurrencies. If one is looking for specific listed tokens, then check their availability on the exchange before starting with the process.
Step 2. Complete KYC verification
As part of the exchange’s KYC process, verify the required information. This includes identity proof and an address with supporting documents, such as a passport and national identity cards, to complete this legal requirement. Most KYC verifications are approved instantly on working days, but it may take one to two days in some cases and varies for each exchange.
Step 3. Complete the necessary requirements
Ensure a private and secure internet connection, as public WiFi may pose security risks. As a best practice, one may activate two-factor authentication (2FA) during the verification process. Additionally, connect a bank account or a credit card for fiat currency deposits to the exchange to initiate the first buy. While exchanges have built-in wallets or hot wallet support, it is recommended as a security best practice to use a personal cold wallet.
Step 4. Purchase required cryptocurrency
Once the newly created account is funded, one may buy Bitcoin or any other cryptocurrency supported by the exchange. Consider transaction fees, security and payment methods while making trades. Depending on the payment method, funds may take minutes to days to arrive at the exchange.
Digital assets and NFTs in Argentina
Nonfungible tokens (NFTs) have gained widespread popularity in Argentina owing to its strong crypto and blockchain-driven community. Like other nations, NFTs are minted and traded on popular NFT marketplaces such as Magin Eden, Blur, OpenSea and others.
However, the absence of dedicated legislation or a legal framework specifically tailored for NFTs currently leaves a legal void in Argentina (as in other jurisdictions) with respect to NFTs.
Despite this, innovation in the area remains unstifled. In 2023, Argentine low-cost airline Flybondi integrated blockchain into its ticketing process by issuing e-tickets as NFTs on the Algorand blockchain. This utility NFT allows passengers to change their name, transfer, or sell their “NFTickets” independently.
The Argentine Grand Lodge of Free and Accepted Masons, the first Freemason affiliation to utilize Web3 technology in a philanthropic NFT collection, explored the NFT market with CryptoMasons with the intention of utilizing it for philanthropic endeavors.
The artistic San Luis province in Argentina emerged as a strong supporter of crypto and NFT adoption, earmarking treasury funds as collateral for its new United States dollar-pegged stablecoin named “Activo Digital San Luis de Ahorro.” The province has also pledged support for local artists through an upcoming NFT project, illustrating a multi-faceted approach to integrating blockchain technology into various sectors.
Crypto regulations in Argentina
Argentina’s stance on cryptocurrency remains dynamic, with ongoing developments shaping the regulatory environment. While Argentina does not recognize BTC as a legal tender, it has not imposed a blanket ban on cryptocurrencies either. The regulatory landscape in Argentina is characterized by a combination of openness and a lack of comprehensive legislation.
In late 2022, the Argentine government took a proactive step by establishing a National Blockchain Committee to look into the intricacies of cryptocurrency regulation within the country. This move reflects a growing recognition of the need for a structured approach to navigate the evolving crypto landscape.
“Blockchain technologies have emerged as one of the greatest innovations in the field of information technologies, providing the effective possibility of optimizing public-sector processes and the traceability, transparency, and efficiency of the services provided to citizens by recording transactions with higher levels of security,” the government stated in its decree for the committee.
Moreover, in 2023, the government of Buenos Aires showed ambitious plans to run validator nodes on the Ethereum proof-of-stake (PoS) blockchain and issue blockchain-based digital IDs, showcasing a commitment to embracing blockchain technology.
Despite the relatively relaxed crypto policies, the Central Bank of Argentina (BCRA) prohibits national banks from engaging in the trading of digital assets or offering crypto services to clients.
Regulators in Argentina have been vocal about the risks associated with crypto assets, particularly initial coin offerings (ICOs). Frequent warnings have been issued to the public, emphasizing the high-risk nature of certain crypto investments. Furthermore, Argentina’s tax agency conducted raids on crypto-mining farms in October 2022, reflecting heightened scrutiny in the sector.
Is crypto taxable in Argentina?
On Feb. 2, 2024, under Milei’s presidency, the newly formed Argentine government proposed a comprehensive bill known as the “Law of Foundations and Initial Measures for Argentinian Liberty.” This legislative proposal, driven by Interior Minister Guillermo Francos, aims to ease tax burdens across various sectors in Argentina.
One notable aspect of this legislative move is the omission of provisions regarding cryptocurrencies from tax declarations. Previously, cryptocurrency owners had the privilege of declaring their holdings and enjoying a favorable fixed tax rate. However, if the proposed legislation passes, holding cryptocurrencies in Argentina will not incur taxes. Holding crypto will remain untaxed, while tax obligations will only arise from capital gains generated through sales, and that, too, will be below a specific threshold.
Additionally, international transfers of cryptocurrencies will be subject to a tax rate ranging from 5% to 15%, aiming to attract foreign cryptocurrency investments. Notably, the bill proposes a provision for declaring cryptocurrencies without necessitating evidence of their origin.
The future of cryptocurrency in Argentina
Argentina’s cryptocurrency regulations blend ongoing exploration, regional variations and occasional cautionary measures. As the country grapples with the complexities of economic inflationary woes and the growing adoption of crypto, further developments will shape the future of crypto regulation in Argentina.
With regulatory bodies now in place and the proposed Finance Bill being debated in 2024, there will be clarity in the role of cryptocurrency as a medium of payment, trade and investment for the average Argentine citizen.
Written by Shailey Singh
