Financial institutions in the South American country have been banned from offering customers any operations involving unregulated digital assets, since Thursday due to Argentina’s central bank prohibiting crypto
Just days after two large institutions declared they would let clients buy Bitcoin and other digital currencies, the monetary authority banned operations that allow bank clients to purchase crypto.
Besides that, the prohibition includes assets whose returns are determined by the ups and downs of cryptocurrencies.
Currently, Argentines are embracing cryptocurrencies at a fast pace as recurring currency crises and inflation that runs above 50% annually erodes the value of their savings. According to specialized website Chainalysis, the country is in the world’s top 10 with the highest acceptance of crypto.
Earlier this week, Banco Galicia, the country’s largest private bank by market value, and digital bank Brubank announced they would allow purchase of cryptocurrencies including Bitcoin, Ether and USDC to their customers.
The central bank banned such operations for the entire financial sector after the publication on Thursday, saying it aims to “mitigate the risks involved in transactions of digital assets.” Those include and money laundering, high volatility and cyberattacks according to a statement.
Financial institutions should focus on “financing investment, production and consumption of goods and services,” it added.