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The Argentine Senate has voted in approval of a heavily criticized letter of intent the country drafted with the International Monetary Fund (IMF) which includes a provision discouraging the use of cryptocurrencies.
The formalization of the agreement will help the South American country, which experienced a year-on-year inflation of 52.3% in February, restructure a $45 billion loan it received from the IMF in 2018. Argentina and IMF, signed a Technical Memorandum of Understanding (TMU) on March 3, including the crypto provision.
The provision, entitled “Strengthening financial resilience,” says:
“To further safeguard financial stability, we are taking important steps to discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation.”
The letter adds:
“While commercial banks remain liquid and well-capitalized, strong bank oversight will continue, especially following the unwinding of pandemic-related regulatory forbearance.”
The letter-of-intent also confirms Argentina is working to reform its payment digitalization process “to improve the efficiency and costs of payments systems and cash management.”
Argentina has developed into a leading crypto hub in the South American region. With the IMF already disapproving El Salvador’s adoption of Bitcoin as legal tender, it seems on a mission to prevent a second Latin American country to do the same.