DLT and cryptocurrencies
FinTechs belonging to this category offer financial services using crypto currencies. This category also includes FinTechs utilising blockchain and distributed ledger technologies (DLT) upon which Bitcoin and Ethereum are based, among others. FinTechs develop and do research in this field in order to create new services – e.g. crypto currency exchange markets, wallet providers, NFTs-related services, new payment services, "smart contracts" or new clearing and settling services.
Attitude of the country towards financial services using crypto currencies
Crypto currencies in Argentina are experiencing high levels of adoption over the last years. The crypto community in Argentina is one of the biggest in the world and is growing even more popular every day, especially among younger generations. In fact, Argentina occupies position number 10 in the ranking of global adoption of crypto currencies. This is explained mainly because of the recurrent economic crises that Argentina has experienced over the last decades. For individuals and companies this macroeconomic scenario implies restrictions to the free access to foreign exchange currencies, import restrictions and high rates of inflation. These unfavourable macroeconomic conditions provide a fertile ground for the crypto asset market to expand in our country as more people desire to protect their savings against inflation and to overcome the prohibition on purchasing and transferring foreign currency abroad.
Obligations and requirements to provide financial services using crypto currencies described above
In Argentina, crypto currencies are not prohibited, and are therefore legal. However, the government has issued dispersed regulations related to taxation and the prevention of money laundering and the financing of terrorism regarding crypto currencies. With regard to the prevention of money laundering and financing of terrorism, the UIF dictated Resolution 300/2014, which determined that certain obliged parties (“Sujetos Obligados”) must inform to a government body all transactions involving crypto assets.
Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
The government has not yet implemented specific regulations on the issuance, exchange or, in general, use of crypto currencies, instead choosing to observe ongoing developments regarding their impact on the Argentine market. However, there are currently several draft laws aimed at regulating various aspects of crypto assets and the crypto currency industry.
Market size for financial services using crypto currencies and biggest companies in this business area
The crypto asset market in Argentina is growing fast over the last years. According to the study “Estudio Fintech 2020 Ecosistema Argentino” prepared jointly by the Cámara Argentina de Fintech and International Development Bank, the number of FinTech companies within the segment of blockchain and crypto currencies has more than doubled from 2018 to the end of 2020. In this sense, the number of blockchain and crypto companies in Argentina grew from 11 to 25 companies.
Regarding transactional volume, it is estimated that in Argentina transactions involving crypto currencies represent an annual volume of US$ 3,300 million. Furthermore, it is estimated that savings in Argentina involving crypto currencies represent around US$ 68,800 million.
Additional comments regarding the economic situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
Considering the present adverse economic scenario of Argentina, it is expected that the crypto asset segment continues to grow exponentially. Restrictions on the access to the foreign exchange market as well as the historic tendency of Argentineans to protect their saving from high inflation rates, makes stablecoin and cryptodolar an interesting sector to look over in the medium and long term.